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Every car insurance policy will come with an excess. This is the amount you would have to pay in the event of any claim. We will cover how excess works as well as the differences.

What exactly is excess in my insurance policy?

As we mentioned earlier, the excess is any amount you will be required to pay to your insurer towards any claim you make on your car policy. In almost all cases, it will be two separate amounts: compulsory excess (also known as ‘standard excess’) and voluntary excess. Let’s take a look:

  • blue-bullet-pointCompulsory excess: This is a fixed amount applied by the insurer, you cannot change this.
  • blue-bullet-pointVoluntary excess: This is added on top of the compulsory excess by the insurer, you will have the option to choose this amount.
  • blue-bullet-pointTotal excess: This is the total excess amount when adding both the compulsory and voluntary excesses together.

As an example, if your compulsory excess was £200 and you selected a voluntary excess of £150, your total excess would be £350. This means you would pay the first £350 towards any claim. So if you had a claim for £950, your insurer would pay the remaining £600.

If you get an online car insurance quote, the voluntary excess may already be selected for you and you will have the option to increase or decrease this. Look for this option at the top of your results page.

Why does an insurance provider have a policy excess?

The cost of your insurance cover is going to be heavily influenced by your choice of car.

An insurance provider does not want everyone to start making a claim for every small instance. If they allowed this to happen, their operational costs would increase significantly along with your insurance premium.

This requires policy holders to pay the first part towards any claim they make, this helps reduce and even prevent smaller claims. Most insurers will state that your insurance policy is in place for times when you really need it.

Compulsory excess explained

This is a minimum fixed amount that your insurer will require you to pay towards any claim you make. This amount will be based on your quote details. In most car insurance policies, this is usually between £200 to £300.

If you are a young or inexperienced driver, this could be a higher amount. Another factor that can determine your compulsory excess is the value of your vehicle, a more expensive car can come with an increased excess. There are some cases where no compulsory excess is added, in these instances your insurer will likely increase the minimum voluntary excess.

Voluntary excess explained

You will have the option to choose a higher or lower voluntary excess at the time of taking out your policy. This is the amount you agree to pay the insurer towards any claim you make, this amount is added on top of the compulsory excess. The level of voluntary excess can vary between £50 to £1000+.

Remember: Compulsory excess + Voluntary excess = Total excess

What happens if I decide to increase or decrease my voluntary excess?

You may wish to increase your voluntary excess as this will help you get cheaper car insurance. It is strongly recommended that you compare the price difference for each voluntary excess to ensure you are getting the best value.

Sometimes choosing the highest voluntary excess will not affect the premium by much. It is important to choose your voluntary excess with careful consideration. Choose the level that is most affordable for you and gives you a fair discount. Ultimately, you will be the one paying the total excess in the event of making a claim.

Need help finding affordable car insurance with different levels of excess? Utility Saving Expert compares all the leading insurance providers. It’s quick and simple to get an online quote within minutes.

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