Car insurance excess is the amount that you must pay towards the overall cost of an insurance claim. It is not exclusive to car insurance and is also applied to other types of insurance policies, including travel, home, pet, and health. There are two types of excess: compulsory and voluntary.

• Compulsory excess: This is set by the insurer and cannot be changed. It is a fixed amount that you will have to pay in the event of a claim, and the amount is set by your insurer. The figure can vary depending on driving experience, age, and the type of car.

• Voluntary excess: This is an amount chosen by the policyholder. It is added to the compulsory excess, and both amounts are automatically added together. The total amount is what you will have to pay in the event of making a claim. The voluntary excess amount you choose to pay may affect the cost of your premium, and typically, the higher your voluntary excess, the cheaper your premium will be.

An excess helps keep the cost of handling and meeting insurance claims down, and so the premiums everyone pays are cheaper. It is designed to cover you for the more expensive claims that you couldn’t settle by yourself. If there was no excess set, then this may encourage third-party drivers to claim for minor damage such as scrapes and scratches on bodywork.

It is important to note that whenever you make a claim, an excess will be required to be paid, unless it’s specifically stated otherwise in the policy wording. If you have a claim under both your home and contents policies for the same incident at your home, you will only have to pay one excess, which will be the highest excess.