What is a car insurance excess?
The excess is the amount of money your insurance company will ask you to pay if you make a claim on your policy.
It does get a little more complicated than this since the excess is usually split into 2 parts, which are added together:
This is a non-negotiable amount set by your insurance company. The amount will depend on your age, the type of car you have and the type of claim you make – this is usually higher for young drivers but will come down with age and driving experience.
This amount is adjusted and agreed when taking out the policy – if you agree a higher voluntary excess it will usually bring down the cost of your quote BUT bear in mind that you will have to pay this amount if you do make a claim so it could work out more expensive in the long run.
Top tip If your car is stolen you will be considered ‘at fault’ for the purposes of the claim and you will have to pay the excess. Make sure your voluntary excess isn’t MORE than the value of your car.
How is the excess paid?
Normally the excess will be deducted from the amount paid out to you by your insurance company. So if your excess is £250 and you make a claim for £1000 you will receive £750 from your insurer.
Hang on, what if the crash isn’t my fault?
If your car is damaged in a crash that is proved to be someone else’s fault, you won’t have to pay the excess. The other driver’s insurance should cover the entire cost of the repairs.
If there is a dispute over who is at fault you may have to pay the excess initially to get the repairs authorised but you’ll be paid back if it is later proved that the other party was responsible.