What is excess in insurance?

When it comes to car insurance, understanding the term ‘excess’ is crucial. An ‘excess’ isn’t about overpaying on your policy. Instead, it refers to the portion of a claim that you, as the policyholder, are responsible for paying before your insurer steps in to cover the remaining costs.

At Aviva, the total excess you pay is made up of two parts: compulsory excess and voluntary excess. The compulsory excess is set by the insurer and cannot be changed, while the voluntary excess is an additional amount you agree to pay on top of the compulsory excess.

It’s important to check your policy documents, as your excess amounts will be clearly shown there. This article will delve into what ‘excess’ means in the context of car insurance.

This is the amount you must pay when you make a claim on your insurance. This amount is set by your insurer, and you can’t change it. It’s important to check your policy documents as your compulsory excess amount will be noted there.

So, if your compulsory excess is £250 and the repair bill for your car is £1,000 (for which you make a successful claim), then £250 is deducted from £1,000 and your insurer will pay £750. This is a simplified example and would differ if you reached your policy limit or had a voluntary excess to pay (more on this below).

This is an optional amount you agree to pay in the event of a claim.

It is in addition to any other excesses applied by your insurer. You'll have the option to choose a voluntary excess amount when you get a new policy or renew your existing one. 

The total excess can vary depending on several factors. For instance, additional excesses may be applied if you drive a high-performance or high-value car, if you are a young or inexperienced driver, or if you choose to use your own garage for repairs rather than your insurer’s approved repairers.

When you make a claim, all excess amounts are added together and this is the amount you would pay to your insurer's approved repairer when you collect your car after repair or in the case of a total loss this amount would be deducted from your settlement amount.

Let's use an example to show how it works:

• Car repair bill (claim amount) - £1500
• Young driver/inexperienced driver excess - £200
• Non-approved repairer excess - £200
• High performance car excess - £250
• Voluntary excess - £150
• You pay: £800 towards the claim
• Your insurer pays: £700

It’s also worth noting that the claim amount must be more than the total excess amount. In other words, if the car repair bill was £800 - using the example above - and the total excess amount is £800, you would not be able to claim.

A voluntary excess could lower the amount of money you pay for your insurance policy. Choosing to pay a voluntary excess means the insurer won't have to pay out as much if you make a claim, so your premium could come down. But, it’s important to carefully consider your voluntary excess amount before making a decision. You’ll need to be able to pay the total voluntary excess amount if you have a successful claim.

Windscreen cover excess works differently. The amounts are set by your insurer and usually vary depending on if you have your windscreen repaired or replaced. If you have your windscreen repaired, the amount you have to pay towards the repair is typically lower than if your windscreen needs replacing. The exact amount you need to pay will depend on your policy, so always check your policy documents carefully.