A simples guide

A Guide to Home Insurance Excess

On insurance policies you will usually see the term “excess” mentioned. Excess is the amount that you will have to pay towards a claim before the insurance company will make a contribution.

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Compulsory v Voluntary

There are two types of excess, compulsory excess and voluntary excess.

Compulsory excess is set by the insurance company. Not every policy will have a compulsory excess but most do.

Voluntary excess is agreed between the parties. When you buy cover, you will usually be offered the option to pay more in the event that you make a claim. This is on top of the compulsory amount already set by the insurer. This extra amount is known as voluntary excess. Some insurers will allow up to an extra £750 of voluntary excess.

You might think, ‘why would you offer to pay more excess?’ The answer is that the higher the voluntary excess, the lower the premium could be.  

There is clearly a balance to be struck. On one hand, increasing the excess will help save you money on the premium. However, in the event of a loss you need to be able to afford the excess.

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Home Insurance Excess

There are two types of home insurance, home building insurance and home contents insurance. The amount of excess can be quite different depending on the risk being insured.

Types of claims that typically have large claim values, such as subsidence, will normally attract a higher compulsory excess. So for example, you could expect the compulsory excess to be around £75 for accidental damage, and the voluntary excess could go to £250 – meaning the total you would pay in the event of a claim is £325. On the other hand, the compulsory excess for subsidence could be £1,000 with a voluntary excess of £250 meaning you would pay £1,250 if you had to make a claim.

Comparing insurance quotations couldn’t be simpler.

However, it’s important that you understand the compulsory excess amounts and agree sensible additional voluntary excess amounts to be sure that you can afford to pay the combined total excess in the event that you have to make a claim. Why not start a quote now and see how adjusting your excess can make a difference to your premium. 

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