Understanding Car Insurance Excess: Compulsory vs Voluntary

Summary

• Compulsory excess: Set by your insurer based on your age, car, and risk profile. You can't change it.
• Voluntary excess: An additional amount you choose to pay. Raising it reduces your premium.
• Total excess: Compulsory + voluntary = what you pay towards any claim.
• Don't set it too high: Make sure you can actually afford your total excess if you need to claim.

Car insurance excess is the amount you pay out of your own pocket when you make a claim. Understanding how it works can help you get the right balance between premium and protection.

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What Is Car Insurance Excess?

Excess is your financial contribution towards any claim you make. It applies per claim, not per year.

For example, if you have an accident and the repair costs £2,000, and your excess is £500:

• You pay: £500
• Insurer pays: £1,500

If the repair costs less than your excess (say, £300), it's not worth claiming. You'd pay the full amount anyway and risk losing your no-claims discount.

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Types of Excess

Compulsory Excess

Set by your insurer. You have no control over this. It's based on:

• Your age (young drivers often have higher compulsory excess)
• Your driving experience
• The type of car
• Your claims history

Typical compulsory excess ranges from £100 to £350 for most drivers. Young or inexperienced drivers may face £500+.

Voluntary Excess

This is the additional amount you choose to pay on top of the compulsory excess. You can usually set this from £0 to £1,000 or more.

• Higher voluntary excess = lower premium
• Lower voluntary excess = higher premium

Total Excess

Your total excess = compulsory + voluntary.

Example: £250 compulsory + £300 voluntary = £550 total excess per claim.

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How Excess Affects Your Premium

Increasing your voluntary excess reduces your premium because you're taking on more of the risk yourself.

Voluntary Excess	Typical Premium Impact
£0	Highest premium
£250	Moderate reduction
£500	Good reduction
£1,000	Largest reduction, but high risk if you claim

Golden rule: Never set your voluntary excess higher than you could afford to pay at short notice. If you can't afford £500 tomorrow, don't set a £500 excess.

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When Do You Pay Excess?

You pay excess when:

• You make a claim on your own policy
• You're at fault in an accident
• Fault cannot be established
• The other party is uninsured

When You Don't Pay Excess

• The other driver was at fault AND their insurer pays out
• Your insurer recovers costs from the other party (you may be refunded)
• Windscreen claims (many policies have a separate, lower excess)

Note: Even in a non-fault accident, you may need to pay excess upfront and get it refunded later when liability is established.

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Windscreen Excess

Most comprehensive policies include windscreen cover with a separate (usually lower) excess:

• Chip repair: Often £0-25 excess
• Full windscreen replacement: Often £75-100 excess

Windscreen claims often don't affect your no-claims discount, making them worth using.

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Excess Protection Insurance

You can buy separate "excess protection" policies that reimburse your excess if you claim.

Pros

• You can set high voluntary excess (lower premium) without the risk
• Costs around £20-50 per year

Cons

• Another policy to manage
• May have limits on number of claims
• Check what's actually covered

Run the numbers: if excess protection costs £40/year and your excess is £500, it only makes sense if you're likely to claim.

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Excess for Young and New Drivers

Young drivers (under 25) and new drivers often face much higher compulsory excess:

• Compulsory excess of £500-1,000 is common
• Adding voluntary excess on top can create very high totals
• Named driver excess may also apply

Be very careful with voluntary excess if you're young. A £300 voluntary on top of £750 compulsory means £1,050 to find if you crash.

For more tips, see our insurance for young drivers guide.

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Named Driver Excess

If you add a young or inexperienced driver to your policy as a named driver, a "named driver excess" may apply when they're driving.

This is in addition to compulsory and voluntary excess. It can add £250-500 to the total.

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Tips for Setting the Right Excess

1. Only set what you can afford: Could you pay your total excess tomorrow?
2. Compare quotes at different levels: See how much you actually save
3. Consider your claims likelihood: If you rarely claim, higher excess might work for you
4. Check excess protection: Might make sense for high-excess policies
5. Factor in both excesses: Don't forget compulsory when calculating total

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Common Questions

Do I pay excess if the accident wasn't my fault?

Often yes, initially. But if your insurer successfully recovers from the at-fault party, you should get your excess refunded.

Can I reduce my compulsory excess?

Not directly. But as you gain experience and a clean record, it tends to decrease. Changing insurers may also result in different compulsory excess.

What's a good voluntary excess to choose?

It depends on your budget and risk tolerance. £250-300 is a common choice that balances savings and affordability.

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Final Thoughts

Car insurance excess is a trade-off between premium savings and out-of-pocket costs when you claim. Set it at a level you can genuinely afford, and factor in both compulsory and voluntary amounts.

A lower premium isn't worth it if you can't afford to claim when you need to.

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