What is excess in car insurance?

What is Excess in Car Insurance?

When you’re sorting out your car insurance, it’s easy to focus on the premium. But there’s another number that really matters when it comes to costs - your excess.

This is the amount you agree to pay if you ever need to make a claim. It’s something every policy includes, but it’s not always well understood. That’s why we’re here to walk you through what it is, how it works, and how to make sure you’re choosing an amount that suits you.

Here’s what we’ll cover: 

• What car insurance excess actually means

• The difference between compulsory and voluntary excess

• When you do (and don’t) need to pay it

• How your excess choice can affect your premium

• What excess protection insurance is — and when it could be useful

• How 1st Central can support you with excess protection cover

What Is Car Insurance Excess?

Car insurance excess is the amount you agree to contribute toward the cost of a claim.

It’s a fixed sum that comes out of your payout if you make a claim. For example, if your repair costs total £500 and your excess is £100, you’ll pay the first £100 and your insurer will cover the remaining £400.

This excess applies each time you make a claim - it’s not a one-off for the year. So if you have more than one incident, you’ll need to pay it again.

At 1st Central, we also offer excess protection cover, a handy add-on that lets you claim your excess back after a successful claim.

What’s the Difference Between Compulsory and Voluntary Excess?

There are two parts to your car insurance excess: compulsory and voluntary.

Compulsory Excess

This is the amount your insurer sets. It’s based on things like:

• Your age and driving experience

• The type of car you drive

• Your previous claims history

You won’t be able to change this - it’s fixed as part of your policy.

Voluntary Excess

This is an extra amount you can choose to add on top. It’s optional, and increasing it can often bring your premium down a bit, though that’s not always guaranteed.

Example:
If your compulsory excess is £250 and you choose a voluntary excess of £250, your total excess would be £500.

Here’s a quick side-by-side:

How Does an Insurance Excess Work?

Your excess kicks in most times you make a claim,  but how it works depends on the situation.

You’ll usually pay an excess when:

• You’re at fault in an accident

• No one else can be held responsible

• The third party can’t be identified (e.g. hit and run)

• Your insurer isn’t reimbursed by another insurer

• It’s a windscreen claim (though this can vary by provider)

You won’t usually pay an excess when:

• Another driver is found to be at fault and their insurer pays the full amount

• Your policy includes specific cover that waives the excess

• You’ve added excess protection cover and are able to claim it back

And if your repair costs are less than your excess, you won’t be able to claim at all. For instance, if your excess is £250 and your repairs only cost £150, you’d need to cover the full amount yourself.

How Much Voluntary Excess Should You Choose?

Setting a higher voluntary excess can help reduce your premium,  but only if you’re confident you could afford to pay that amount if you needed to.

Things to think about:

• Could you realistically pay the full excess if you had to make a claim tomorrow?

• How much would you actually save on your premium by increasing your voluntary excess?

• Do you want the option to reclaim your excess with excess protection cover?

Example quote:

For example, if your voluntary excess were set at £100, your annual premium might be around £520. 

If you increased your voluntary excess to £500, your premium might drop to about £480. 

In this scenario, you’d save £40 a year on your premium, but you’d need to pay £400 more if you made a claim. 

This is only an illustration, but it shows why it’s important to pick a level that suits your budget - both for the ongoing cost and if something unexpected happens.

Top tip:
Set your voluntary excess at an amount you’d be comfortable paying upfront. It’s not just about reducing your premium - it’s about being realistic with what you could afford in a worst-case scenario.

Can I Change My Excess or Add Excess Protection After Buying My Policy?

No, you cannot usually change your voluntary excess or add excess protection cover mid-term. These changes can only be made when:

• You take out a new policy

• At renewal

• When you change your vehicle

If you’re insured with 1st Central and want to make a change at one of these points, it’s quick and easy to update your policy. Just log in to your online account or contact our team - we’ll help you explore the options and make sure your cover still works for you.

What Is Excess Protection Insurance – and Is It Worth It?

Excess protection insurance (also called Excess Protect Cover) is an optional add-on that lets you claim back the excess you’ve paid after making a successful claim.

It’s particularly useful if you’ve chosen a higher voluntary excess to bring your premium down. That way, you’re still protected from paying out a large sum if something happens.

Here’s how it works:
Say you make a claim for £1,000 and your excess is £500. Your insurer pays £500, and if you’ve added excess protection to your policy, you can claim back that £500 too (subject to the policy terms).

You can get this as:

• A standalone product from a third party

• An add-on through your insurer (like 1st Central)

It’s not essential for everyone, but if you’d struggle to cover your full excess in an emergency, it’s worth considering.

Take Control of Your Excess with 1st Central

Understanding your excess is a simple but powerful way to stay in control of your car insurance costs. Whether you’re adjusting your voluntary excess to suit your budget, or adding a bit of extra protection for peace of mind, it helps to know exactly where you stand.

To sum up:

• Your excess is the amount you pay toward a claim

• It includes both compulsory (set by your insurer) and voluntary (chosen by you) amounts

• The higher your voluntary excess, the lower your premium might be, but only if you can afford to pay it when needed

• Excess protection insurance helps cover that cost if you do claim

Ready to find a car insurance policy that suits your budget, and gives you more control over your excess?

Compare cover options, explore policy features, and see how 1st Central can help you stay protected, whatever the road throws your way.

Get a quote with 1st Central