What is excess in insurance?

‘Excess’ is the amount of money you’ll have to pay if you want to make a claim against your insurance. 

The excess is the portion of the claim that you’re agreeing to pay yourself. Your insurance company will then cover the rest up to the policy limit.

Your excess is a fixed amount that’s agreed when you take out an insurance policy. You’ll be able to see the amount in your insurance policy documents.

Here’s an example of how excess might work.

• you have a car insurance policy with an excess of £250

• you make a claim against your insurance for repairs costing £2,000

• your claim is successful 

• your insurer takes £250 out of the £2,000 repair bill, meaning you’ll receive £1,750 to cover the repairs.

When buying a car insurance policy, there are two types of excess to be aware of:

• compulsory excess

• voluntary excess.

This is excess amount that the insurance provider adds to the policy by default. You can’t usually change this amount.

This is the additional excess amount that you can choose to add to your policy, often as a way to lower the overall insurance cost. 

It’s added to your compulsory excess, so if you get an insurance policy with:

• £100 of compulsory excess and

• £100 of voluntary excess 

you’ll have £200 deducted from any insurance claim.

Often it will, but that doesn’t always make it the best choice.

When comparing car insurance deals, one way to find lower prices is to adjust the amount you’ll add in voluntary excess. A higher voluntary excess means your insurance policy will be cheaper to buy.

But think carefully: 

• Is the premium low enough to be worth the higher excess you’ll pay if you make a claim?

• If you ever need to make a claim, will you be able to afford the extra amount it’ll cost? 

There might be better ways to lower your insurance costs – our blog How to get cheaper car insurance goes through some of your other options.

If you’ve had an accident that wasn’t your fault, the insurance company of the driver who caused the accident will usually need to cover your excess cost.

If your insurer or credit hire company is dealing with your claim, they should get the excess back for you if it’s clear it wasn’t your fault, for instance:

• if you weren’t in the car at the time of the accident or

• if your car wasn’t moving at the time of the accident.  

Not all insurance companies handle it the same way, so talk to your insurer to find out what they plan to do. If you have legal expenses cover, this might also cover you for excess and any other out-of-pocket expenses.

Otherwise, you might need to claim the amount back from the other driver’s insurance company. If they’re taking too long or refusing to pay you, you might need to take the insurance company or driver to court.

Excess in travel insurance works similarly to other policies – you’ll need to pay the excess amount towards any claim you make.

However, be aware that travel insurance policies are usually made up of a few parts, and your excess is applied ‘per section’. For example, if an incident happens and you need to claim against:

• the medical expenses section

• the personal belongings section and 

• the money section

of your policy, you’ll have to pay excess three times.

Learn more in our guide What is travel insurance?

Some providers will offer this option. It might be called an ‘excess waiver’ that you can add to one of their standard policies. 

This will increase the cost of buying the policy, so think carefully about whether this would be the right choice for you.

Excess in home insurance is similar to car insurance. You’ll usually have a:

• compulsory excess – a fixed amount set by the insurance company. 

• voluntary excess – an amount you can choose on top of the compulsory excess to try and lower the cost of the policy.

If you get both:

• contents insurance, covering your property in the home and

• buildings insurance, covering the home itself

you'll often find that the excess amounts are different for each part of the insurance. 

You may also find that certain types of claim have a higher excess. Usually, claims involving damage caused by flooding or subsidence will charge a higher excess, so it’s worth looking through your policy details to check.  

If you live somewhere that’s at high risk of flooding, there’s help available to find affordable insuranceOpens in a new window on Flood Re.

If you have a health insurance policy, your excess will work in a similar way to car or travel insurance.

You’ll have to pay the excess amount on any claim you make for healthcare treatments.

You might have to pay the excess multiple times if you claim for:

• more than one person or 

• more than one treatment.

Some policies will have a cap on how much excess you can pay each year – check your policy documents to see if this applies to you.

Learn more in our guide What is private health insurance?

Excess in pet insurance works similarly to car insurance – you will usually have:

• compulsory excess, which is added by the insurance company – often in pet insurance you’ll get a range of options for the compulsory excess

• voluntary excess, which you can add on top of the compulsory excess to lower the cost of buying the policy.

You’ll then pay the total of both the compulsory and voluntary excesses whenever you make a claim.  

A third type of excess exists called co-payments. This is usually added to policies for pets that reach a certain age, often on policies for dogs.

With co-payments, you’ll need to pay a percentage of your vet bills. It’s usually added on top of your compulsory and voluntary excess.

Some pet policies will include co-payments as standard. This means you might still have to pay a percentage for any treatment provided under your insurance policy.

Learn more in our guide Pet insurance – do you need it?

Don’t be confused – excess liability is something very different to ‘excess’ in car and travel insurance.

Excess liability, sometimes known as umbrella insurance, is a type of business insurance. It provides a business with extra protection on top of their standard liability insurance.