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What is an excess?

4 minutes

Being involved in a car accident is stressful. Then you’ve got the worry of getting your car back on the road. One of your biggest concerns might be the cost of claiming on your insurance policy. 

To get a better idea of what you might need to pay, you’ll need to understand car insurance excess and how it affects any claims you make. 

Car insurance excess is basically the amount you agree to pay towards the total cost of repairing your car. It’s typically made up of two parts – voluntary excess and compulsory excess. 

We’ll take a look at the different types of excess, explain how excess works on car insurance and do our best to make sure you’ve got all the information you need. When it comes to choosing your next policy, it’s important you get what’s right for you.

 

What is car insurance excess? 

In simple terms, car insurance excess is the amount you agree to pay towards the repair of your car if you need to make an insurance claim. So, if your car’s damaged in an accident, there’ll be a set amount you’ll have to pay towards the repairs and your insurer will cover what’s left of the cost.

For example, let’s say your car is damaged in an accident and the repairs cost £1,250. If your policy has an excess of £350, then this is what you’ll pay towards the repair, with your insurer covering the other £900.

Before buying a new policy, it’s good to understand the ins and outs of car insurance excess because it’s not just about the cost of repairing your car. It can also affect how much you pay for your insurance policy. 

Most insurance policies come with a compulsory excess, but you can usually change the amount you agree to pay as voluntary excess. Choosing to increase the amount of voluntary excess on your policy can lower your premiums. Just remember, if you agree to pay a higher voluntary excess, you’re agreeing to pay more yourself if you need to make a claim.

What is compulsory car insurance excess?

Compulsory excess is usually a part of every insurance policy and is decided by the insurance provider when you apply for your policy. This can’t be changed. Compulsory excess will be different for every policyholder. It depends on your personal circumstances, including (among other things): 

  • Your car’s make, model and age
  • Where you keep it overnight
  • How long you’ve been driving
  • Your driving history

Some insurers may also charge additional compulsory excesses for drivers under the age of 25, as they’re seen as a higher risk than most other road users. They’ll also normally be higher if you’re insuring a performance or sports car because it’s more likely to cost the insurer more if it’s lost or damaged. 

If you’re looking at a policy with a higher compulsory excess than you can afford, you could consider car excess insurance. This will cover you if you need to make a claim.

 

What is voluntary excess? 

As the name suggests, voluntary excess is different in that it’s dictated by the policyholder. Remember, this is the amount you’ll pay on top of the compulsory excess set by your insurer. 

This means if you’ve been set a compulsory excess of £500 and you agree to a voluntary excess of £250, you’ll pay a total of £750 up front for your car to be repaired after an incident. 

Because you’re agreeing to cover more of the cost of any claim, it’s likely that a higher voluntary excess will bring down the cost of your car insurance policy premium, as it lowers the financial risk to the insurer.

But remember, before you take out a policy you need to be sure you can afford to pay the total amount of excess – both voluntary and compulsory – if you’re involved in an incident.

Why is understanding car insurance excess important?

Understanding how your car insurance excess impacts your policy is important. It doesn’t only affect what you pay when you make a claim, it impacts your monthly or annual payments too. 

When you’re researching car insurance policies, keep excess in mind. Balancing voluntary and compulsory excess effectively and carefully can be of huge benefit to the cost and peace of mind you get from your policy. 

Remember:

  • Higher voluntary excess generally means lower insurance premiums. But if you can’t afford to pay the combined total of your voluntary and compulsory excess charges, it’s worth lowering your voluntary excess amount. 
  • Lower voluntary excess means a lower cost when you make a claim, but you’ll probably have to pay more for your policy in the first place. 
  • Compulsory excess only policies generally mean you’ll pay less if you make a claim as there’s no voluntary excess involved. But make sure you can afford to pay the higher premiums these are likely to come with. 

With Flow, it’s easier to find the ideal car insurance policy to suit you – from your excess charges to your monthly premium. Our monthly rollover policies mean you get the convenience and flexibility to fit your lifestyle, budget and vehicle. And if it's year-round cover you need, take control with Flow Annual car insurance - customise your policy at the touch of a button, 24/7. Browse our car insurance products today to find the perfect match. 

 

FAQs

How do I know what my excess is?

Your car insurance excess should be clearly stated on your policy documents and online profile. It’s always worth taking note of them while you’re shopping for car insurance too. If you struggle to find your excess amount on your Flow policy documents, log in to ‘My Account’ and click on ‘Policy Summary’. You can read our FAQs for more information. 

Can I claim my insurance excess back?

Although you’ll have to pay the excess costs up front, if you weren’t at fault for the accident you’re making a claim for, your excess will usually be refunded to you. You can also cover your excess with car excess insurance. 

What is excess car insurance?

Car excess insurance is useful if your compulsory excess is likely to be more than you can afford. This could be the case if, for example, you’re a younger driver or have a previous driving conviction. In this instance, you might consider car excess insurance to protect you from higher charges in the event of an accident.