2016-08-19

You know you have to pay an excess, but do you know what this is and how much you should volunteer to pay? We demystify excess here.

What is Excess?

If you find yourself needing to claim on your insurance, you will be required to pay a small fixed amount before your cover is paid out. This is called your insurance policy excess.

So, if you set your excess at £250, every time you make a claim you'll have to pay £250 – however much the claim value is. For example, if you claimed for £2,000, the insurance provider would keep £250 and pay you the remaining £1,750.

In some cases, if the accident or damage was the result of another party, the insurer may waver this excess. However, this does vary from provider to provider.

What's the Difference Between Compulsory and Voluntary Excess?

Compulsory excess must be paid no matter what and will fluctuate depending on the level of risk associated.

Voluntary excess is the additional amount you are willing to pay in order to bring down the overall cost of the insurance premium.

If you make a claim, you will have to pay BOTH compulsory AND voluntary excess.

How Much Voluntary Excess Should You Pay?

The amount of voluntary excess you agree to pay will depend on each individual case, but you can assume that the higher the voluntary excess the lower the annual premium is likely to be. This is because you're betting on yourself not to have an accident and the risk is lower for the insurance provider.

When picking your amount, you should consider the fact that the higher the voluntary excess the more likely this figure will be higher than the cost of the claim being made. In this case, it may make more sense not to make a claim at all, but you should still inform your provider of the damage done.

Compare Excess Levels

Are you curious about how your insurance premium will fluctuate when you adjust the level of voluntary excess you are willing to pay? Then compare and save with us online today.