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.
Setting an Excess That Works for You
The right excess is a simple trade-off between the premium you save and the amount you can afford to pay if you claim. Start from what you could comfortably hand over tomorrow, then look at how much each level saves you. If you rarely claim and have a few hundred pounds put by, a £250-£500 voluntary excess is usually the sweet spot. If you have no spare cash, keep the excess low even if the premium is higher — the point of insurance is to protect you, not to leave you unable to claim.
What to Avoid
Choosing an excess you cannot afford. Setting a voluntary excess of £1,000 to cut the premium is only sensible if you could actually write that cheque after an accident. If not, you have created a policy that is hard to use.
Ignoring your total excess. The compulsory excess, set by the insurer, is added to your voluntary excess. A young driver with a compulsory excess of £400 who adds £250 voluntary faces paying £650 on every claim — far more than the headline “excess” suggests.
Selecting voluntary excess to chase the cheapest quote. Some comparison quotes are cheap precisely because they bundle in a high voluntary excess. Make sure you are comparing like-for-like and understand the total you would pay before choosing.
Expecting a refund in every non-fault claim. Excess recovery from the other side is not guaranteed. In a hit-and-run or where blame is disputed, you may keep the excess despite being blameless, so budget for that possibility.
Forgetting the excess varies by policy type. A sensible car-insurance excess is very different from what suits travel or home cover, where the sums involved are smaller. Match your choice to the risks and claim sizes of each policy.
Common Questions
Why do insurers insist on an excess at all? The excess is there to discourage small, administratively expensive claims and to share some of the risk with the policyholder. That is also why a higher excess lowers your premium — you are taking on more of the risk yourself.
How is the compulsory excess decided? Insurers set it according to the risk of your profile — young drivers, high-performance cars, or a history of claims attract a higher compulsory excess. Because you cannot change it, your voluntary excess is the only part you control.
What is the maximum excess I should set? There is no fixed maximum, but a sensible rule is never to set an excess you could not cover comfortably from cash. Many people stop around £500-£1,000; beyond that the premium saving shrinks while the risk grows.
Does a higher excess affect my no-claims discount? No. Choosing a voluntary excess does not change your no-claims discount, which is earned for claim-free years rather than for the size of your excess.