Car insurance excess explained

What is car insurance excess?

An excess is the amount of money you pay towards a claim on your insurance. It’s split into compulsory and voluntary excess – together these make up your total excess amount.

Our research found that only 47% of people say they fully understood what an excess is – that figure dropped to only 18% of those aged between 18-34. And 12% said they didn’t realise they’d have to pay an excess as part of a claim.

This guide will explain how an excess works, when you do and don’t have to pay it, what excess protection insurance is and what to do if you can’t afford to pay it.

What’s the difference between compulsory excess and voluntary excess?

There are two parts of your excess you’ll need to consider:

• Compulsory excess is decided by the insurer
• Voluntary excess is chosen by you based on what you could afford to pay if you claimed

The total excess you pay is the compulsory excess plus the voluntary excess.

For example, if your compulsory excess is £150 and you choose a voluntary excess of £100, your total excess is £250. You’ll need to pay a total of £250 towards the cost of a claim.

You only pay the excess for your losses and when you’re at fault. For example, if you’re responsible for an accident and damage your car.

Why is there an excess?

Excesses help to deter fraud and reduce the number of very low-value claims.

Having to pay an excess means anyone making a claim is more likely to be genuine – it’s a way for insurers to protect against fraud and false claims.

Choosing to pay a higher voluntary excess can also make your insurance premiums cheaper, as you’ll be footing more of the bill yourself.

But you must make sure you choose an excess that you can afford to pay, so don’t push it up too high for the sake of potentially cheaper insurance.

How much is my excess?

The amount of excess you’ll be expected to pay should be displayed when you get an insurance quote. It’ll also be listed in your policy documents.

GoCompare’s car insurance spokesperson, Ryan Fulthorpe, said: “[Our] research shows that excesses, along with other various insurance terms, are still one of the most misunderstood areas of insurance. With 36% of people not even being aware of the amount their current insurance excesses are, it’s no surprise that more than one in ten people (13%) who had to make a claim, said the excess was more than they expected."

Can I change my voluntary and compulsory excess?

You can’t change the compulsory excess as it’s decided by the insurer, but when you compare car insurance you can look for policies that have a certain excess amount.

You can choose the amount of voluntary excess you pay when you take out the policy. If you want to change it after the policy is in place, you should contact your insurer.

Should I increase my voluntary excess?

That’s up to you. If you increase your voluntary excess you could benefit from cheaper insurance. But you need to make sure that the amount of excess is affordable as you’d need to pay up if you claimed.

You’ll have to pay both to make a claim.

When do you have to pay the excess?

Insurers usually ask you to pay the excess immediately to start a claim. The investigation process - which reviews what happened and who was at fault - comes next.

Sometimes your excess is deducted from the total repair bill instead, so you pay it at the end of the claims process. It depends on your insurer, the circumstances of your claim, and the policy.

If the cost of repairs is less than your excess, you can’t claim on your car insurance.

You’ll pay your total excess (compulsory, plus any voluntary) for:

• Fire damage
• Theft
• At-fault accident claims
• Write-offs

Paying the excess when it’s not your fault

If the other driver has admitted fault and has already told their insurer, your excess might be waived. But usually you’ll have to pay it – so make sure you can afford it.

When your insurer is certain you’re not at fault, you’ll get it back.

If the other driver isn’t insured

If you’re in an accident with an uninsured driver, some insurers will protect your no claims discount, waive your excess, or both.

The same applies if the driver leaves the scene and can’t be identified.

When you won’t pay an excess

You won’t have to pay your excess when someone else claims against you.

If you’ve got third party only (TPO) insurance, you won’t have to pay an excess either. That’s because your losses aren’t covered and, when someone claims against you, your insurer covers it.

If you’re found not to be at fault, your insurer claims the excess back from the at-fault party’s insurer, along with other costs.

Assume you’ll have to pay your excess first to get your claim started.

Types of additional excess

Depending on the type of claim you might have to pay a different or additional excess.

We checked 325 comprehensive policies on Defaqto to find out what excess you would pay in different situations.^[2]

If you’re under 21

If you’re under 21, sometimes you’ll have to pay an additional excess on top of the compulsory and voluntary payments.

43% of policies charged drivers under 21 an additional accidental damage excess ranging from £300 to £499.

Make sure you check for any additional excess before you take out a policy.

Windscreen repair

91% of policies charged an excess for windscreen replacement and it was between £60 and £99 on just under half of them.
If your windscreen can be repaired instead, it’s better news - 39% of policies had no excess for a repair.

Non-approved repairers

When your car is damaged, call the insurer first.

If an unapproved garage or mechanic repairs your car, your insurer might ask you to pay an additional excess.

Although most of the policies we checked didn’t charge an additional excess for using a non-approved repairer, two of them doubled the excess.

If your insurer wants you to use an approved repairer, it’ll be written in your policy documents, so check first.

What is excess protection insurance?

Excess protection insurance covers the cost of your excess, up to a limit you choose, when you buy the policy. You pay your excess first, and when your claim is settled, your excess cover policy refunds you.

You can buy it as a standalone policy or as a paid-for extra from some insurers.

Even though you’ll get some, or all, of your excess back, you might still lose your no-claims bonus and your car insurance premiums will probably go up when you renew.

When you buy car insurance with us, GoCompare will refund up to £250 of your excess ^[1] if you do need to claim.

High-excess policies

If you’re a young, inexperienced driver, or if you’ve got driving convictions, it’s difficult to find affordable cover.

You can get lower premiums if you agree to pay a huge excess, but sometimes it’s several thousand pounds.

Unlike standard car insurance, some high-excess policies will require you to pay it even for third party claims. It can be more than the cost of repairs.

It reduces costs for the insurer if you’re in an accident.

Always read the terms and conditions - if the cost of a policy seems too good to be true, it probably is.

What if I can’t afford to pay the excess?

If you can’t afford to pay the excess your insurer might offer you a payment plan, but they could refuse to process your claim.

Always check what excess you’re committing to pay when you take out your policy.

Keep it affordable - don’t put your voluntary excess up too high.

You have to foot part of the bill when you claim on your car insurance – that’s the excess. GoCompare refunds up to £250 of it.^[1]