What Is Car Insurance Excess?
Car insurance excess is the amount you pay towards any claim on your policy. It splits into two parts: compulsory excess set by the insurer and voluntary excess you choose yourself, and the two are added together to form your total excess per claim.
Every UK car insurance policy includes an excess. It exists because it stops small claims clogging up the system and keeps premiums lower for everyone.
This guide covers how the two types work, what happens when you claim, and how to pick a level that balances your premium against what you’d actually pay out of pocket.
Car insurance excess splits into compulsory (set by the insurer) and voluntary (chosen by you), added together every time you claim. Only set voluntary excess at a level you could genuinely pay tomorrow, and if the damage costs less than your total excess, don’t claim, because it still goes on the CUE database.
Try car insurance quotes at different excess levels to find the sweet spot between a lower premium and what you’d actually pay out of pocket.
How does car insurance excess work?
When you make a claim, you pay your total excess first and the insurer covers the rest up to your policy limit. You pay excess on every separate claim, not just the first one in a policy year.
A worked example
Say your compulsory excess is £250 and you chose £200 voluntary on top. Your total excess is £450.
If someone reverses into your parked car and repairs cost £1,200, you pay £450 and the insurer pays £750.
If the damage costs less than £450, there is no point claiming. The insurer would pay nothing and the claim still goes on the Claims and Underwriting Exchange (CUE) database, which insurers check when pricing renewals.
Why excess exists
Excess means policyholders share the financial risk of each claim. Without it, people would claim for every £50 scratch, and processing costs would push everyone’s premiums up.
Related: How Is Car Insurance Calculated?
What is the difference between compulsory and voluntary excess?
Compulsory excess is the minimum the insurer requires and you cannot change it. Voluntary excess is an extra amount you choose to add on top, and raising it lowers your premium.
Compulsory excess
The insurer sets this based on your age, vehicle, postcode, and risk profile. Young drivers typically face compulsory excess of £300 to £500 or more, while experienced drivers with clean records might pay £100 to £250.
You cannot negotiate it down. All UK motor insurers are regulated by the FCA, but excess levels are a commercial decision, not a regulatory one.
Voluntary excess
This is the amount you add on top. Most insurers let you pick between £0 and £1,000 in £50 or £100 steps.
You lock in your voluntary excess when you take out or renew the policy. Check with your insurance provider before assuming you can adjust it mid-term.
| Compulsory excess | Voluntary excess | |
| Set by | Insurer | You |
| Typical range | £100–£500+ | £0–£1,000 |
| Can you change it? | No | Yes, at quote or renewal |
| Affects premium? | Indirectly (risk-based) | Yes, higher = lower premium |
| Paid when? | Every claim | Every claim |
How does excess affect your premium?
Higher voluntary excess reduces your premium because you are taking on more of the financial risk per claim. The first £100 to £200 of voluntary excess delivers the biggest drop, and returns shrink after that.
The break-even calculation
If adding £250 of voluntary excess saves you £60 per year, you need more than four claim-free years before that gamble pays off. Claim in year two and you have saved £120 in premiums but paid £250 extra on the claim.
The only way to know the real saving is to compare quotes at different excess levels. Run the same details with £0, £250, and £500 voluntary excess, then do the maths.
Where excess fits alongside other premium factors
Excess is one of many inputs that determine your premium. Your age, postcode, vehicle group, claims history, and no-claims discount all carry more weight than voluntary excess alone.
If your premium feels high, raising excess is a short-term fix. Longer-term strategies like building your no-claims bonus, choosing a lower insurance group car, or fitting a black box will have a bigger effect.
Related: 10 Tips to Lower Your Car Insurance Premium
How do you choose the right excess level?
Set voluntary excess at an amount you could genuinely pay at short notice if you needed to claim tomorrow. If £500 would be a problem, do not set it at £500.
Questions to ask yourself
- Can you afford it right now? Not in theory. Right now, from your current account, without borrowing.
- How much does it actually save? Get quotes at two or three excess levels and compare. A £200 increase that saves £15 a year is not worth the risk.
- How likely are you to claim? City driving, street parking, and high annual mileage all raise your odds. If you are a young driver with a high compulsory excess already, think carefully before piling voluntary excess on top.
- What is your car worth? If the vehicle is worth £2,000 and your total excess is £1,000, you are self-insuring half its value. At that point, comprehensive cover starts to lose its purpose.
A common-sense range
Most drivers land on £100 to £300 voluntary excess. That is enough to earn a meaningful premium cut without creating a painful bill if something goes wrong.
When do you not pay excess?
There are situations where excess is waived, reduced, or refunded. The details depend on your policy wording and who was at fault.
Windscreen claims
Most comprehensive policies include windscreen cover with a reduced excess: typically £75 for a repair and £150 for a full replacement. Some policies waive it entirely for repairs.
Non-fault claims
If another driver caused the accident, you usually pay your excess upfront when you make your claim. Once the other driver’s insurer accepts liability, your excess is refunded.
This can take weeks or months. If the at-fault driver is uninsured or untraced, the Motor Insurers’ Bureau (MIB) may handle recovery instead.
Excess protection insurance
This is a separate add-on, typically £20 to £50 per year, that reimburses your excess if you claim. It is not the same as accidental damage cover or GAP insurance, which cover different things entirely.
Under the Consumer Rights Act 2015, your insurer must explain the excess terms clearly before you buy. If anything is unclear in your quote, ask before you commit.
Compare car insurance quotes with SimplyQuote and find the right balance between excess and premium.
Frequently asked questions (FAQs)
Most insurers only allow excess changes at renewal. Some permit mid-term adjustments but charge an admin fee of £20 to £35.
Speak to your insurer immediately, as some offer payment plans for the excess amount. Only ever set voluntary excess at a level you can genuinely afford at short notice.
No, your excess amount stays the same unless you change it at renewal. Claiming does affect your no-claims discount and may increase your overall premium, though.
If your combined excess is £500 or more and you drive in high-risk conditions, paying £30 to £50 a year for excess protection could be good value. If your excess is low or you rarely claim, the maths probably does not work out.
Excess is the fixed amount you pay towards any claim. GAP insurance covers the gap between your insurer’s payout and what you originally paid if the car is written off.