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Published on 4th February 2019

Car insurance excess: a quick guide

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Excess is the amount you pay towards your car insurance claims. All car insurance policies come with excess.

There are two types of excess: compulsory and voluntary.

Compulsory excess is the minimum amount you have to pay when you make a claim. This is usually around £200.

Voluntary excess is what you choose to pay on top of your compulsory excess. It usually ranges from between £50 and £1,000.

Total excess is the combined cost.

How different insurers set excess charges

You can choose your voluntary excess, but compulsory excess is set by your insurer. It’s non-negotiable. Your compulsory excess is based on your:

  • Age
  • Driving experience
  • Car
  • Insurance history
  • Convictions

Many insurers offer several options for excess. The more you agree to contribute, the lower your premium will be.

Young drivers usually have a higher compulsory excess. Drivers younger than 21 pay the most, under-25s the second-most, and everyone else pays the same.

Luxury cars also tend to be charged a higher excess.

Paying car insurance excess

You pay car insurance excess when you make a claim. Excess only counts towards your own claim, not anyone else’s.

If you claim £1,000, your insurer might set a £250 compulsory excess. If your voluntary excess is £100, your insurer pays the other £650.

Choosing your voluntary excess

Paying a higher voluntary excess lowers your insurance premiums.

It will cost you more when you make a claim, but it can save you more money in the long term.

Your voluntary excess should be as high as you can comfortably afford. This gives you the lowest possible premiums without the risk you won’t be able to pay it if you make a claim.

You can increase your voluntary excess later.

Paying excess when it’s not your fault

You don’t have to pay excess if the accident isn’t your fault. If you have, you might have to claim it back from the other drivers’s insurance provider.

If your insurer has dealt with the claim, they should pay you the excess.

If you can’t afford to pay for your excess, your:

  • Claim might be refused
  • Insurer might deduct your excess from the pay-out

Before you take out car insurance, do your sums and make sure you can afford the excess.

Credit hire companies: an excess alternative

Credit hire companies pay for repairs to your car if you have an accident that isn’t your fault. They also provide a hire car while yours is being repaired.

The credit hire company claims these costs back from the insurer of the driver who cause the damage to your car.

Credit hire companies charge for the hire car they provide, and some will charge small insurance costs.

It’s usually still your responsibility to let your insurer know about the accident. But your credit hire company may offer to do this for you.

If you have taken out car insurance, review your insurance provider today.

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