Get advice on buying your car insurance policy and car insurance excess from the experts at Admiral Car Insurance.
What is car insurance excess?
An excess is the amount you pay (or that is held back by your insurance company) in the event of any claim, regardless of who's to blame.
The excess will vary depending on your car, the age and experience of the drivers on your policy and if you have opted to take protected or guaranteed No Claims Bonus. You can also choose to add a voluntary excess - giving you more control over the cost of your insurance.
Why should you have car insurance excess?
It's to deter people making lots of claims for minimal damage (such as a cracked door mirror) that nevertheless might soon add up. Insurance is there for the really big claims you probably wouldn't be able to pay, as we explained in Why You Need Car Insurance.
How does it work?
Let's say your policy has a £50 excess, and you're unlucky enough to have an accident. The cost of repair is £1,050, so we pay out £1,000, you pay the £50 excess and the bill is paid in full.
Or perhaps you've just suffered that broken door mirror. All it needs is a new lens, which is £20. As that's less than your £50 excess, you can't claim for it - but at least the cost of repair is affordable.
The excess makes sure your insurance is there to help when you really need it, for example to settle that £1,000 repair bill that would be more inconvenient to pay.
Nearly all policies come with two types of excess - compulsory and voluntary.
What is compulsory excess?
Compulsory excess is a fixed amount that you will have to pay in the event of a claim and the amount is set by your insurer. The figure can vary depending on driving experience, age and the type of car.
A new driver might have to pay a higher compulsory excess than a more experienced driver as they are viewed as a higher risk. While expensive performance cars could carry a higher compulsory excess than a standard make and model.
What is voluntary excess?
The voluntary excess is added to the compulsory excess - these figures together are the amount you will have to pay if you make a claim. But as the name suggests, you can choose how much voluntary excess you wish to pay.
By increasing your voluntary excess you may be able to bring your premium down, but bear in mind that you will have to pay this out if you make a claim.
Lower excess, higher premium or higher excess, lower premium? You decide, because you're in control.
When do I pay the excess on car insurance?
You pay the excess in the event of any claim made on your insurance policy regardless of who's to blame. However, if it's proved the accident was the other person's fault and the full cost is recovered from their insurer, the excess is refunded so you don't lose out.