Voluntary excess is the amount you agree to pay towards an insurance claim. It’s usually in addition to the compulsory excess your insurer sets on your policy.
So, if you’re involved in an accident and need to make a claim, you’ll need to pay these excess amounts before your claim is processed.
Here’s an example:
If you chose a voluntary excess of £300 when you took out your policy, and your insurer has set a compulsory excess of £200, you’ll need to pay a total of £500 in the event of a claim before your insurer covers the remaining costs.
But, there’s more to voluntary excesses than that. In this guide, we’ll show you how these excess amounts work, and how they can affect the overall cost of your policy.
How voluntary excess affects your insurance policy
When choosing a car insurance policy, you're given the option to select a voluntary excess amount. This can range from £0 right up to £1,000.
A higher voluntary excess usually means a lower insurance premium (that's the overall cost of your monthly or annual payment), but it also increases the amount you'll need to pay if you make a claim.
Tip: If you're a careful driver with a good driving record, choosing a higher voluntary excess might save you money on your ongoing insurance premiums. However, you’ll need to make sure you can afford to pay the voluntary excess if you make a claim.
Voluntary vs compulsory excess: what's the difference?
Before choosing an insurance policy, it's important to know the difference between voluntary and compulsory excesses.
Compulsory excess is the amount your insurer requires you to pay towards a claim – it's non-negotiable.
Voluntary excess is an additional amount that you can choose to pay. This excess can change the overall cost of your policy.
Let’s say you’re a younger driver with very little driving experience. You’re likely to have a higher risk profile than a more experienced driver, which will increase the amount of your compulsory excess. In this case, you might choose a lower voluntary excess to avoid a large payment in the event of a claim. However, a lower voluntary excess can drive up the cost of your insurance payments.
So, it’s always a good idea to get a few quotes with different excess amounts to make sure you’re getting the best deal for you.
When do you pay voluntary excess?
You’ll need to pay your voluntary excess, along with your compulsory excess, when making a car insurance claim.
Before making a claim, it’s important to consider if the cost to repair any damages will be less than the total excess amount.
For example, if the repair costs after a minor accident are £300 and your total excess (voluntary + compulsory) is £500, it may be more cost-effective to cover the repairs yourself rather than making a claim.
Adjusting your voluntary excess
Voluntary excess is adjustable, allowing you to change it to suit your finances. This can help you to balance the cost of your insurance with the cost of any potential claim payments.
Tip: Don’t forget to review your voluntary excess amount each year before you renew or buy a new policy. If you find that you could afford to pay a higher voluntary excess in the event of an accident, it could help to lower your premium, saving you some money over the long run.
Choosing the right voluntary excess for you
Selecting the right voluntary excess is all about balancing the cost of your regular insurance payments with the potential costs in the event of a claim.
A lower voluntary excess can mean a higher insurance premium, but you’ll have less to pay if you make a claim. A higher voluntary excess means lower regular insurance payments, but you’ll need to have money set aside to pay out in the event of a claim.
By regularly assessing your financial situation, and your overall risk of making a claim, you’ll be able to choose the right voluntary excess amount for you.
Frequently asked questions
Can you claim back excess on car insurance?
Yes, in most cases you can claim back the excess amount if the accident wasn't your fault. If you’ve had to pay the excess for a car accident that you didn't cause, you can usually reclaim this amount from the other driver's insurance company. If your insurer has dealt with the claim on your behalf, they should be able to claim the excess back for you.
Is voluntary excess worth it?
Choosing a voluntary excess on your car insurance can help to lower your regular insurance payments. A lower voluntary excess usually means higher insurance premiums, but you’ll have less to pay if you make a claim. Whereas a higher voluntary excess means lower insurance payments, but you’ll need to pay more in the event of a claim.
What should you set your voluntary excess to?
When choosing your voluntary excess, try to decide how much you can afford to pay if you have an accident and need to make a claim. By choosing a higher excess amount, near the top end of what you can afford, you can help to reduce the cost of your regular insurance payments.
But, if you choose a high excess and you're unable to pay it following a claim, your insurer might not cover you. It’s all about balancing the cost of your regular insurance payments with the potential costs in the event of a claim.
Why is my compulsory excess so high?
Your compulsory excess is calculated by your insurance company, and it often depends on things like your age and your driving experience. Young or inexperienced drivers typically have a higher compulsory excess than more experienced drivers, as their insurance risk is considered to be higher.
How do I recover my car insurance excess?
If you’re involved in an accident that isn't your fault, and the full cost is covered by the other driver’s insurer, you may be able to recover the excess you paid. This involves proving that the other driver was at fault, and also depends on the full recovery of costs from their insurer.
Do you get refunded excess?
You can get refunded for your excess through something called “excess protection insurance”. This covers the cost of your excess up to a certain limit, and refunds you once your claim is settled. You can buy it as a standalone policy or as an add-on from some insurers.
How long does it take to get your excess back from insurance?
The timeframe for getting your excess back after a claim can vary widely, from a couple of months to over a year. This depends on the complexity of your claim and how quickly and efficiently the insurance companies can settle the matter.
What if the repair cost is less than the excess?
If the repair cost for your vehicle is less than the excess you have to pay, it's generally better not to make a claim. You’ll need to get the damage properly assessed to make sure you have an accurate amount for the repair costs. But, if the repairs are likely to cost less than your excess, you may be better off covering the repair costs yourself and avoiding the higher excess payments.
Is it better to have higher or lower voluntary excess?
Choosing a higher voluntary excess can lead to lower regular insurance costs (known as premiums). That’s because it indicates to your insurer that you’re less likely to make low-value claims, and also reduces the potential payout for them. However, a higher excess means that you’ll need to pay more following an accident.
On the other hand, a lower voluntary excess usually means higher insurance premiums, but you’ll have less to pay if you make a claim.
It’s all about balancing your ongoing regular insurance costs with the potential amount you’d need to pay if you had an accident.
