The ‘excess’ on your motor insurance policy is a key tool for keeping your premium down. In crude terms, the higher the excess, the lower your premium will be. But that doesn’t mean you should merrily plump for a big excess just to keep a lid on the premium you pay. If you have to make a claim, the insurance company will deduct your excess from the payout (that’s why you sometimes hear of an excess being called a ‘deductible’). Clearly, the higher the excess, the bigger the inroads into what you will receive. Push the excess high enough and you won’t get anything for smaller claims. For example, set your excess at £400 and there’s no point claiming for anything below that amount. If fact, once you take any eligibility for no claims discount into account, there’s probably not much point claiming for anything below £700 or £800. So you have to ask yourself if you have sufficient funds available to carry this sort of cost yourself.