When you make a claim, your insurer won’t cover the whole cost – you’ll also need to make a contribution. This contribution is called the excess. It’s divided into two parts: the compulsory excess and the voluntary excess.
The compulsory excess is set by the insurer, but you can choose how much of a voluntary excess you’re willing to pay on top of that. For instance, if you have a compulsory excess of £200 and a voluntary excess of £100, and you’re in an accident that causes damage worth £800, you’ll pay the first £300 and your insurer will cover the remaining £500.
While it might seem like a good idea to set your voluntary excess to £0, choosing a higher voluntary excess is likely to make your premium cheaper – so if you never have an accident you’ll likely pay much less overall.