How Does Car Insurance Excess Work UK? (2026 Guide)
Car insurance excess is the amount you pay towards any claim before your insurer covers the rest. This guide explains compulsory vs voluntary excess, how to set the right level, and how it affects your premium. D10
When you make a car insurance claim in the UK, you are required to pay a portion of the cost yourself before your insurer covers the remainder. This contribution is called your excess. It is one of the most misunderstood aspects of car insurance — and setting it incorrectly can leave you significantly out of pocket.
What Are the Two Types of Excess?
1. Compulsory Excess
This is set by your insurer and you have no control over it. It is typically higher for younger or inexperienced drivers, higher-risk vehicles, and certain claim types such as windscreen or fire damage. Compulsory excess tends to range from £100 to £500 depending on the policy and driver profile.
2. Voluntary Excess
This is the additional amount you choose to pay on top of your compulsory excess. Agreeing to a higher voluntary excess reduces your annual premium — but it increases your out-of-pocket cost if you claim. You must be able to pay both your compulsory and voluntary excess at the same time.
How Excess Affects Your Premium
| Voluntary Excess Added | Typical Premium Reduction |
|---|---|
| £0 | No reduction (base premium) |
| £100 | ~5–8% saving |
| £250 | ~10–15% saving |
| £500 | ~15–25% saving |
| £1,000 | ~25–35% saving (high risk if claiming) |
These are approximate ranges — the actual saving depends on your insurer, vehicle, age, and history. Use comparison sites to test different excess levels before committing.
What Happens at the Point of a Claim?
When you make a claim, your insurer will deduct your total excess from the settlement. If your car is repaired via an approved garage, you pay the excess directly to the garage. If your car is written off, the insurer pays you the agreed value minus your total excess. If the other party is at fault and admits liability, your insurer may recover the excess from them — but this can take time.
Does Excess Apply to All Claims?
Not always. Many policies have separate excess amounts for specific claim types. Windscreen repair is often covered for free (or at a reduced excess of £10–£25), while windscreen replacement carries its own excess. Fire and theft claims may have a different compulsory excess to standard accident claims. Always check your policy schedule carefully.
What Is the Right Excess to Set?
A good rule of thumb: set your voluntary excess at the maximum you could realistically afford to pay from savings at short notice. If you have £500 readily available, setting a £500 voluntary excess makes financial sense. If you could not find more than £200 at short notice, do not set a voluntary excess above that level regardless of the premium saving.
Our Verdict
Getting your excess right is one of the simplest ways to optimise your car insurance. A higher voluntary excess lowers your annual premium — but only makes sense if you can genuinely afford to pay it when you claim. Review your excess level every year at renewal: as your savings grow or your risk profile changes, so should your excess strategy.
Frequently Asked Questions
What is car insurance excess?
Excess is the amount you must pay towards any claim before your insurer covers the rest. It is made up of a compulsory excess (set by the insurer) and any voluntary excess you choose to add.
Does excess apply if I'm not at fault?
In most cases, you still pay your excess initially. If the other driver admits liability and their insurer accepts responsibility, your insurer may recover the excess from them — though this can take weeks or months.
Can I insure my excess?
Yes. Excess protection insurance is a low-cost add-on (typically £20–£50/year) that reimburses your excess after a claim. It can be worth considering if you have a high total excess.
Does my excess apply to windscreen claims?
It depends on the policy. Most comprehensive policies cover windscreen repair for free or at a small excess (£10–£25). Full replacement typically carries a higher separate excess. Check your policy schedule.
What happens if the repair cost is less than my excess?
You pay the full repair cost yourself — your insurer pays nothing. In this case it is usually not worth making a formal claim, as doing so may affect your no claims discount and push up your future premiums.
Does setting a higher excess always save money?
Generally yes, but the saving diminishes at very high levels. Most drivers find the sweet spot is a total excess of £400–£700. Beyond that, the premium saving rarely justifies the financial risk.
Disclaimer: This article is for informational purposes only and does not constitute financial or legal advice. Always verify figures with official sources such as gov.uk, the FCA, or your insurer before making decisions.
Last updated: March 2026 · Author: Chandraketu Tripathi
