Excess
An excess (called a deductible in the US and some other markets) is the portion of a claim that you pay yourself before the insurer pays the rest. If your excess is £300 and your claim is £800, you pay £300 and your insurer pays £500.
Compulsory and voluntary excess
Most policies contain two components of excess:
Set by the insurer. Non-negotiable. Reflects the insurer's view of the minimum retained risk appropriate for your risk profile. Young drivers, for example, typically face a higher compulsory excess on motor policies.
Chosen by you, on top of the compulsory excess. A higher voluntary excess reduces your premium. Your total excess on a claim = compulsory + voluntary combined.
Compulsory excess: £200
Voluntary excess: £150
Total excess: £350
Claim amount: £1,200
Insurer pays: £850 (£1,200 − £350)
How to choose the right voluntary excess
The key question is: what is the highest amount you could comfortably pay at short notice after an unexpected incident? Set your voluntary excess at that level.
- Never set a voluntary excess you could not actually afford — the financial pressure after a claim is worse if you have chosen an excess that exceeds your savings.
- Model the breakeven: if increasing your excess from £250 to £500 saves £60 per year in premium, it takes 4–5 claim-free years to recoup the extra £250 risk you are taking. Our policy comparison tool can model this.
- Note that voluntary excess applies to every claim — if you claim twice in a year, you pay the full excess twice.
Specialist excess types
Some policies apply additional excesses for specific perils or circumstances. Common examples:
- Windscreen excess: Often lower than the standard motor excess — sometimes zero on comprehensive policies.
- Flood excess: Some home policies apply a separate, higher excess for flood claims — check the schedule, not just the summary.
- Young driver excess: An additional compulsory excess applied when a young or inexperienced driver is involved in a motor claim.
- Subsidence excess: Standard on home policies in areas at risk, often £1,000 or more.
Specialist excess clauses are usually found in the conditions or schedule section of your policy. Always read the schedule — the summary may not list every excess that applies.
Excess FAQ
Frequently asked questions
- A compulsory excess is set by the insurer and cannot be changed. It reflects the insurer's minimum acceptable retained risk for your risk profile — for example, young drivers in motor insurance typically face a compulsory excess of several hundred pounds regardless of their choices. A voluntary excess is an additional amount you choose to take on top of the compulsory excess, in exchange for a lower premium. Your total excess on a claim is compulsory plus voluntary combined.
- The relationship diminishes at higher levels. Moving from a £250 to a £500 voluntary excess on a motor policy often produces a meaningful saving; moving from £750 to £1,000 may save very little. The optimal voluntary excess is usually the highest amount you could comfortably pay at short notice after an accident — not the highest the insurer offers. Use our tools to model the breakeven point for different excess levels.
- In most general insurance policies (motor, home, travel), the excess is applied per claim — each separate incident triggers a new excess. This is different from health insurance in the US, where the deductible is typically applied annually: once you have paid your annual deductible in total, the insurer covers 100% (or the coinsurance percentage) for the rest of the year.
- If the value of your claim is equal to or less than your excess, the insurer pays nothing and you cover the full cost yourself. You should still notify your insurer of the incident, as failure to report may breach your policy's notification conditions — but you are not obliged to formally submit a claim. A notification without a claim payment typically does not affect your no-claims bonus, though this depends on the insurer.