What is car insurance voluntary and compulsory excess?

Key Takeaways

• Your car insurance excess payment is split into two parts - the compulsory excess your insurer requires and a voluntary amount that you can choose on top

• This payment essentially goes towards the cost of the claim before your insurer picks up the rest of the amount

• Setting a higher voluntary excess payment when you take out cover can help reduce your costs - just be sure you can afford it if you need to claim

What is car insurance excess?

Car insurance excess is the amount you pay towards the cost of a claim on your policy before your insurer pays the rest. The excess amount will be shown on your policy documents, normally split into two parts - the compulsory excess payment and the voluntary excess payment.

What is compulsory excess?

Your compulsory excess payment is set by your insurer, and is non-negotiable - you will need to pay this amount at minimum in order to make a claim. It’s essentially a fee that is intended to prevent people making frivolous claims on their insurance policies by adding an extra cost - so you’ll only claim when it’s worth this cost.

What is voluntary excess?

Your voluntary excess payment is the amount you choose to pay on top of the compulsory amount. You’ll be able to set this yourself, and the higher the amount you choose, the lower your premiums will usually be - for similar reasons as above, it makes you less likely to make a claim unless it’s worth the additional cost.

So, if you make a claim on your policy worth £1500 and your compulsory excess is £200, you’ll get a pay-out of £1300. However if you volunteer an excess fee of a further £150, your payout will drop to £1,150 - but the total cost of your policy will be cheaper.

What is the difference between compulsory and voluntary excess?

Your compulsory excess payment is non negotiable, while you can set your voluntary excess payment as anything from £0 to £200 or £300 or even more.

How much voluntary excess should I pay?

When deciding on an amount for your voluntary excess payment, make sure it’s still an amount you can afford to pay alongside your compulsory payment in the event of a claim. Also keep in mind that if the value of your claim is less than your excess payment, it’s likely your insurer won’t cover you.

How does my voluntary excess affect my car insurance premiums?

That being said, paying more will often bring your costs down, so it’s important to find the amount that suits you. When you run a quote on MoneySuperMarket, you’ll be asked how much voluntary excess you wish to add to your policy. The resulting list of quotes will show the total excess (compulsory and voluntary) that you’ll have to pay if you make a claim.

You can then alter the voluntary excess to see how it affects the price you pay. It is always worth checking how much the policy would cost if you set the voluntary excess to £0 – if you can afford it, this would make sure you are covered as much as you can be if your car was to be damaged or stolen.

It’s also worth remembering that you can’t change your voluntary excess down the line if you need to make a claim, so make sure to consider it carefully at the point you buy your policy.

When do you pay excess on car insurance?

You’ll pay the excess on your car insurance claim if you’re involved in an accident that is your fault, or if you can’t claim from the other driver - for example, if they’re uninsured or you don’t know who caused the damage. It’ll either be up front before you claim, or at the end of the process once you receive the payout.

Are there situations where you don’t pay excess for a claim?

Insurers might agree to waive the excess fee if you can prove the blame lies with someone else and they can recover the cost from the other motorist’s insurer. You also won’t need to pay an excess for claims made by other drivers, just your own claims.

Can I insure my excess payment?

You can take out excess insurance, which will cover the cost of the excess you pay if you make a claim. It offers a pay out that will usually cover your voluntary and compulsory excess, usually coming with a maximum amount per year for which you can claim - but only once you’ve proven that your claim has been successful.

The maximum amount you can claim for could be anywhere from £250 to £1,000 per year, and this will affect the total cost of your excess insurance policy.

Additionally, it’s worth noting that you can take out a single excess insurance policy that covers excess payments for car insurance as well as home, travel and pet insurance. These are sometimes known as lifestyle excess insurance policies.

Other ways to get cheaper car insurance

Finding the right balance with your voluntary and compulsory excess payments is important as it affects your ability to make a claim as well as your premiums. If you want to explore other ways to bring the cost of cover down, you should consider:

• Pay annually: Paying your car insurance premiums up front every year might mean a significant expense at the time, but it will work out cheaper than paying monthly

• Consider telematics cover: A telematics car insurance policy can be particularly useful for young drivers that already face high premiums, so long as you can demonstrate sensible driving habits

• Improve your car’s security: Installing alarms and immobilisers not only reduces the risk of theft, but it can also bring your insurance costs down as a result of the lower risk

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, as well as 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.