Car Insurance Excess

What is compulsory and voluntary excess on car insurance?

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Find out what car insurance excess is and if adding a higher voluntary excess can make your policy cheaper.

Car on a country road

What is excess?

When you take out car insurance, your policy will have an excess, displayed as a sum of money. This excess is the amount you pay yourself as a contribution if you need to make a claim against your car insurance.  

For example, if your excess is £250 and you claim on your insurance for repairs worth £750, the insurance company will keep £250 and reimburse you £500.

Compulsory excess is set by your insurer and cannot be changed, but you can opt to put a higher voluntary excess on to your policy.

What is the difference between compulsory and voluntary excess?

There are two types of excess on a car insurance policy:

  1. Compulsory excess: This is set by your insurer and is non-negotiable. You won’t be able to change compulsory excess as your insurer sets this based on a number of factors.
  2. Voluntary excess: You can choose to add a higher excess on to your policy in what is known as voluntary excess. This amount is chosen by you and added to your compulsory excess.

How much is compulsory excess?

According to MoneySuperMarket data the average compulsory excess on a car insurance policy is around £1951, but this can be more or less for many reasons. Insurers set the compulsory excess based on how much of a risk you pose in making a claim and look at factors such as your age, driving experience and the type of car you drive.

How much will your compulsory car insurance excess cost?

Substantiation: Data from fully comprehensive car insurance policies on MoneySuperMarket in March 2020, full driving licences only

Will a higher voluntary excess make my insurance cheaper?

It’s very likely that if you opt for a higher voluntary excess that this will make your premium cheaper, but be aware that if you need to make a claim then you’ll have to cover the cost of the excess.

Data from quotes on MoneySuperMarket in March 2020 showed adding higher levels of voluntary excess could reduce the cost of your premium. If £50 voluntary excess was added – when previously the voluntary excess was zero – then customers saw an average 1% saving on their premium.

But a voluntary excess of £250 – the average added by MoneySuperMarket customers2 - resulted in an average reduction of 5% on the premiums.

Voluntary excess can reduce your car insurance costs

Data from car insurance policies on MoneySuperMarket, March 2020, where there was more than one enquiry per customer and voluntary excess was added to the quote search when there was originally no voluntary excess

How much voluntary excess should I pay?

The amount of voluntary excess you should add to your policy depends on how much you can afford to pay out of your own pocket if you need to make a claim.

While putting a higher voluntary excess on to your policy will help to reduce your premium, you need to be sure that should you have to make a claim, you can swallow the full cost of the excess on your policy if your claim is substantial and costs more than this.

What is excess insurance?

Excess insurance runs alongside your car insurance policy and covers the cost of the excess you pay if you make a claim against your car insurance. The amount covered is usually a pre-agreed limit and applies to both voluntary and compulsory excess.

You can choose the upper limit on which the excess insurance policy will pay out and this will happen once you have provided evidence that you have made a successful claim on your car insurance.

You will have to pay for excess insurance – typically between £30 and £70 - and this will depend on the cap set, plus if you apply your excess insurance to a single policy or other insurance cover, such as your home, travel or pet insurance.

How do I know what excess I pay?

When you run a quote on MoneySuperMarket you will be asked how much voluntary excess you wish to add to your policy. Once you see the results of your quotes you will see the total excess including both your compulsory excess and any voluntary excess added.

On the results screen you will be able to alter the voluntary excess to see the difference in price.

Do I still have to pay excess if an accident wasn’t my fault?

If you were in an accident and another driver was at fault, then your insurance company will likely pursue a claim against their insurance policy. In that situation you won’t have to pay the excess. You will also pay no excess if your car insurance is a third-party policy, as your losses are not covered and your insurer will cover claims made against you.

If repairs to your vehicle cost lower than the excess you have on your policy, then you won’t be able to claim on your insurance and will need to cover the cost of repairs yourself.

Cover for legal expenses is also available in case you need to take legal action after an accident that wasn’t your fault.

Compare car insurance quotes

Comparing car insurance quotes with MoneySuperMarket is a quick and easy way to find affordable cover. All you need to do is tell us a little about yourself, the car you’re insuring and your driving history, and we’ll put together a list of quotes tailored to your needs.

You’ll be able to compare policies by the cost and coverage you’ll get alongside the excess you’ll need to pay if you make a claim. Once you’ve found the deal you want, just click through to the provider to finalise your purchase.

It’s important to remember the cheapest policy available isn’t always the best suited to you. We recommend aiming for a balance between the cost and the cover you’ll get.

1 Data from MoneySuperMarket in March 2020 looking at fully comprehensive car insurance policies, full driving licences only

2 Data from MoneySuperMarket in March 2020 looking at fully comprehensive car insurance policies, full driving licences only

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