A guide to car insurance excesses

The last thing you want after an accident is to find out your excess isn't quite what you thought. So we've put together this guide to help you get to grips with it: what it is, how it works and what happens if you need to make a claim.

What's a car insurance excess?

It's a set amount you pay your insurance company if you make a claim. There are two types – compulsory and voluntary.

Your insurer sets the compulsory excess: it varies depending on the type of policy you have, your age and the kind of car you drive.

The voluntary excess is controlled by you, so you can set the amount you pay on top of your compulsory excess when you claim.

So, if your compulsory excess is £300 and your voluntary excess is £150, you'll have to pay £450 to your insurer towards the cost of your claim.

Should I increase the voluntary excess on my car insurance?

The higher the voluntary excess you pay, the lower your monthly payments will be. But the knock-on is that you'll need to pay out more if you want to make a claim. So if you decide to up your voluntary excess to keep the cost of your insurance down, make sure you can still afford it if anything happens.

For example, if your voluntary excess is £75 and your compulsory excess is £125, and you make a claim for £600, you'd pay the first £200 of the cost of getting your car fixed. Your insurer would pay the remaining £400.

But if your voluntary excess was £500 and your compulsory excess was £100, you'd have to pay the entire £600 yourself.

If you're happy to do that, paying more voluntary excess could be for you. But if you can't afford to pay such a large amount in one go, it might be worth trying to keep your voluntary excess low.

What if my total excess costs more than the repairs?

You must always tell your insurer straight away when you become aware of any incident that may result in a claim, even if you choose not to claim. If you don't, and the damage turns out to be worse than you thought, or if there was another car involved and you have to pay for the damage, you might not be covered down the line.

Do I still pay the excess if it was someone else's fault?

In most cases, if you're not at fault then an excess is not due, but not all insurance companies are the same. Check your policy to be sure.

So what do I need to remember?

We hope this guide has made it easier to understand car insurance excess, but what are the main points to remember?

1. You're in control – choose a voluntary excess that suits your budget.

2. Weigh up the costs - remember, the lower the excess, the more your repairs could cost.

3. Ask questions - if there's anything you're not sure about, speak to your insurer.

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