Insurance Excess Explained: Compulsory vs Voluntary Excess

The excess is the amount you pay towards an insurance claim before the insurer pays the rest.

How Excess Works

Claim Amount	Excess	Insurer Pays	You Pay
£1,000	£250	£750	£250
£500	£250	£250	£250
£250	£250	£0	£250
£5,000	£250	£4,750	£250

You always pay the excess regardless of who is at fault (if you claim).

Types of Excess

Type	Description
Compulsory excess	Set by the insurer, can’t be changed
Voluntary excess	You choose it to lower your premium
Total excess	Compulsory + voluntary added together

Compulsory Excess

Risk Factor	Typical Compulsory Excess
Young driver (under 25)	£250-£500
High-performance car	£250-£500
Previous claims	£200-£500
Standard driver	£100-£250
Low-risk driver	£0-£150

Insurers set compulsory excess based on risk. You can’t change it.

Voluntary Excess

Voluntary Excess	Effect on Premium
£0	Highest premium
£100	Moderate
£250	Lower
£500	Much lower
£1,000	Lowest (not always available)

Higher voluntary excess = lower premium. But you must be able to pay it if you claim.

The Trade-Off

Excess	Premium Saving	Risk
£250	Baseline	If you claim, you pay £250
£500	Save £40-80/year	Pay £500 if you claim
£1,000	Save £80-150/year	Pay £1,000 if you claim

Choosing the Right Excess

Factor	Low Excess	High Excess
Can afford to pay £500+ if you claim	Not needed	Good option
Likely to claim frequently	Low excess	Not recommended
Rarely make claims	High excess saves money	Good option
Prefer predictable costs	Low excess	Variable

General rule: set voluntary excess to £250-£500 for most people.

Excess in Different Insurance Types

Insurance Type	Typical Excess
Car insurance	£100-£500
Home insurance	£50-£250
Travel insurance	£25-£75
Pet insurance	£50-£150
Health insurance	£0-£500

What Happens in a Non-Fault Claim

Scenario	Excess Treatment
At-fault claim	You pay excess
Non-fault claim (not at fault)	You pay excess, insurer tries to recover from the other side
Non-fault claim, other party identified	Excess may be refunded (not guaranteed)
Non-fault claim, hit-and-run	You keep the excess

Can You Waive the Excess?

Situation	Can You Waive?
Windscreen claim	Often waived (or lower excess)
Very large claim	No, excess still applies
First claim with some insurers	Sometimes (NCD protection)

Bottom Line

The excess is what you pay towards every claim. Compulsory excess is set by the insurer; voluntary excess you choose to lower your premium. A £250-£500 voluntary excess is a good balance for most people. You pay the excess even in non-fault claims (though it may be recovered later). Set an excess you can afford to pay — don’t choose £1,000 if you can’t cover it.