Excess is payable when you make a claim on your car insurance policy and how much you can pay varies depending on a number of factors. In this article, we explain how car insurance excess works, the different types of car insurance excess and when you need to pay excess on your car insurance.
What is car insurance excess?
The excess on a car insurance policy is the amount you will have to pay out of your own pocket if you make a claim. So, for example, if you have a car insurance policy with a £250 total excess and make a claim for a total of £2,000 your insurance would only cover £1,750 of your claim. Car insurance excess is designed to reduce the number of small claims made as policyholders often find it uneconomical to make a claim when the excess is taken into account.
What are the different types of car insurance excess?
The total excess on your policy is typically comprised of two types of excess; compulsory excess and voluntary excess. A compulsory excess is set by the insurer and is an amount that you have to pay, and a voluntary excess is an amount that you can choose to pay in addition to the selected compulsory amount. Below we explain the different types of excess in more detail and explain the differences between compulsory and voluntary excess.
What is compulsory excess on car insurance?
Compulsory excess is set by the insurance company and is dependent on a number of factors including the driver's age, where you live, your claims history and the type of car you drive. How much is set can vary between insurance companies and policyholders and you may find that additional excess amounts are payable if you are under 25 or have less driving experience. Some policies will also have a separate windscreen excess amount that you will pay if your windscreen is damaged and needs repairing or replacing.
What is voluntary excess on car insurance?
Voluntary excess is an amount selected by the policyholder and is in addition to the compulsory excess set by the insurance company. Usually, you can opt to increase the voluntary excess to an amount that suits you however you need to ensure that this amount is affordable as you will have to pay this along with the compulsory excess when making a claim. It is also worth noting that choosing a higher voluntary excess can sometimes reduce the overall car insurance premium you will pay.
Remember that the excess is the amount payable in the event of the claim so you need to ensure that it is affordable.
How much does increasing your voluntary excess reduce your car insurance premium?
Opting for a higher voluntary excess should result in a reduction in your car insurance premium. It is thought that increasing your voluntary excess from £0 to £250 results in the most significant reduction in cost, and whilst increasing your voluntary excess further will continue to lower your premium, the incremental savings do diminish. It is always worth remembering that should you need to make a claim you will need to pay the excess so it must remain affordable.
How much does car insurance excess cost?
How much you pay for your car insurance excess varies depending on a number of factors including the type of car you are driving, your age and your driving experience. You can choose to amend your excess by increasing the voluntary excess amount and this in turn could reduce your car insurance premium. Remember that the total excess payable is the compulsory and voluntary excess amounts combined.
When do you pay excess on car insurance?
Any excess included in your car insurance policy will be payable when you make a claim for an accident that was your fault and will usually need to be made upfront in order to get the claims process moving. If the accident or damage was not your fault then you wouldn't normally be expected to pay any excess but at times, you may have to pay the excess and claim it back at a later date. With some claims, it may not be clear who was at fault and the responsibility may be deemed to be shared and so both parties may have to pay the excess on each of their respective car insurance claims. If you are found to not be at fault for the claim, you may be able to claim the excess you paid back.
How to buy car insurance
When searching for car insurance quotes it is always worth comparing quotes with different excess amounts and via various different providers. Comparison sites such as Confused.com* are a good way to easily compare quotes from multiple providers at once. Once you have completed this exercise you can easily select the car insurance policy that is best suited to your needs with the total excess that you are comfortable choosing.
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