Loading ...
When comparing car insurance, many drivers focus mainly on the premium. However, the excess is also very important.
Your excess is the amount of money you may need to pay towards a claim. MoneyHelper explains that excess is the part of a claim you agree to pay yourself before the insurance company covers the rest, up to the policy limit.
Understanding excess can help you compare car insurance quotes more carefully.
Car insurance excess is your contribution towards a claim.
For example, if your total excess is £400 and your claim is accepted, you may need to pay £400 towards the claim. The insurer then deals with the remaining covered amount, subject to the policy terms.
Your excess amount should be shown in your policy documents.
Compulsory excess is set by the insurer. You cannot usually remove it.
The insurer may decide the compulsory excess based on factors such as:
Young or new drivers may sometimes have a higher compulsory excess.
Voluntary excess is the extra amount you choose to pay on top of the compulsory excess.
MoneyHelper explains that adding voluntary excess to compulsory excess can reduce the premium, but customers should remember they will receive less back if they claim because both excesses may be deducted.
If your compulsory excess is £250 and your voluntary excess is £300, your total excess may be £550.
This means you may need to pay £550 if you make a relevant claim.
A higher voluntary excess may make your quote cheaper, but it can become expensive if you need to claim.
Before choosing a high excess, ask yourself:
Could I comfortably pay this amount after an accident?
If the answer is no, the policy may not be suitable.
Some policies may have different excess amounts for different claims, such as:
Always read the policy documents carefully.
A policy with a cheaper premium but a much higher excess may not be better value. Compare the full policy, not just the headline price.
Look at:
If your car has a lower value, a very high excess may not make sense. You may end up paying a large amount compared with the value of the claim.
Some insurers may ask you to pay the excess upfront when making a claim. Others may deduct it from the settlement. Check how your insurer handles it.
A cheaper premium is not always better if the excess is too high. Choose an excess that helps manage your premium but remains affordable if you need to claim.
What is car insurance excess?
It is the amount you may need to pay towards a claim.
What is the difference between compulsory and voluntary excess?
Compulsory excess is set by the insurer. Voluntary excess is chosen by you.
Can higher voluntary excess reduce my premium?
It can, but it may also mean you pay more if you make a claim.