What is an insurance excess (and how to choose it)
Your excess is what you pay towards a claim before the insurer pays the rest. Here’s how compulsory and voluntary excess work — and the trade-off.
On this page
The excess is one of the most misunderstood parts of a policy — and it quietly changes how much a cheap premium really costs you. Here’s the plain version.
The two types
| Type | Who sets it | Notes |
|---|---|---|
| Compulsory excess | The insurer | Fixed for your policy; you can’t remove it |
| Voluntary excess | You | An extra amount you choose to add on top |
At claim time, both are added together — that combined figure is what you pay before the insurer covers the rest.
The trade-off
In short
Your excess is what you pay towards a claim before the insurer pays the rest — a compulsory part set by the insurer plus any voluntary amount you add. A higher voluntary excess cuts your premium but raises what you’d pay to claim, so set it to something you could comfortably afford.
Frequently asked questions
What’s the difference between compulsory and voluntary excess?
The compulsory excess is fixed by the insurer for your policy. The voluntary excess is an extra amount you choose to add on top. At claim time they’re added together — that total is what you pay before the insurer pays out.
Should I choose a higher excess to save money?
A higher voluntary excess lowers your premium, but only choose an amount you could comfortably afford to pay if you had to claim tomorrow. Saving a little each year isn’t worth it if a claim then leaves you unable to cover the excess.
Do I pay the excess even if it wasn’t my fault?
Often you pay it upfront and the insurer recovers it from the other party if you weren’t at fault — you then get it back. Check how your policy handles this.
Sources & last checked
- How insurance excess works — MoneyHelper (Money & Pensions Service)
- Insurance — Citizens Advice
Last checked against official sources: 9 July 2026.