| ★ TL;DR TL;DR: A policy excess is the amount you pay towards a claim before your insurer pays the rest. Every UK motor insurance claim involves an excess deducted from the settlement. There are two types: compulsory (set by the insurer) and voluntary (chosen by you). If you make a claim for an accident that was another driver's fault, you typically do not pay the excess, the at-fault insurer covers it. UK average motor premium: £622 (ABI Q4 2025). |
Last reviewed: 26 April 2026
What a policy excess is: the plain definition
A policy excess is the fixed amount you contribute to any insurance claim before the insurer pays the remainder. When your motor insurance policy pays out for a claim, the excess is deducted from the total settlement or repair cost. Your insurer covers everything above your excess; you cover the excess portion.
The excess appears in your policy schedule, the personalised document issued at inception that summarises your specific cover, premium, and conditions. The schedule will state your compulsory excess and, separately, any voluntary excess you chose at quotation. Both apply simultaneously when you claim.
For a straightforward example: if your car is damaged in an accident and the repair costs £2,000, and your total excess is £500 (£300 compulsory plus £200 voluntary), the insurer pays £1,500 and you pay £500. The excess is not paid separately to the insurer, it is deducted from what the insurer contributes to the repair or settlement.
Compulsory excess: what it is and who sets it
The compulsory excess is set by the insurer at the time of underwriting and cannot be reduced or waived by the policyholder. It reflects the insurer's actuarial assessment of the policyholder's risk profile, higher-risk profiles carry higher compulsory excesses.
Standard compulsory excess levels for a low-risk driver on a standard vehicle are typically £150 to £300. For young drivers aged 17 to 24, many insurers apply an additional young-driver compulsory excess of £200 to £500 on top of the standard amount, producing a total compulsory excess that may reach £500 to £800. This young-driver additional excess exists because the actuarial risk of claim for this demographic is substantially higher, and the additional excess provides the insurer with partial protection against small, frequent claims.
The compulsory excess applies to every claim regardless of who was at fault. It is set per policy year and cannot be changed without arranging a new policy or formal mid-term adjustment.
Voluntary excess: what it is and how you set it
The voluntary excess is an additional amount you choose to contribute to any claim, on top of the compulsory excess. You select the voluntary excess at the point of getting a quote, common options are £0, £100, £150, £200, £250, £300, £500, or £1,000, though specific options vary by insurer.
Selecting a higher voluntary excess reduces your annual premium, the insurer prices your policy more cheaply because you are agreeing to self-insure a greater portion of any claim. Selecting zero voluntary excess produces the highest premium for the same policy, because the insurer bears the full cost of any claim above the compulsory excess alone.
The voluntary excess is locked in at the quotation stage for the policy year. If you want to change it mid-term, you must request a formal adjustment from the insurer, which typically involves a premium recalculation and may involve an administration fee.
Who pays the excess and when you do not
You pay the excess on claims where you are making a claim under your own policy, primarily at-fault claims, or claims where liability is unresolved. The excess is deducted from every claim regardless of how the repair is arranged.
There is an important exception: where another driver is wholly at fault for the incident and their insurer accepts full liability, your excess should ultimately be recoverable from the at-fault driver's insurer. In practice, this recovery may take time, through the subrogation process or through motor legal protection uninsured loss recovery. In the interim, some insurers require the excess to be paid upfront and then reimburse it once recovery is confirmed.
For non-fault claims where the at-fault insurer accepts immediate liability and arranges the repair or replacement directly, your own policy excess may not apply at all, the at-fault insurer manages the claim without involving your own policy's excess structure.
Where the excess appears in your documents
The policy schedule, issued at inception and at each renewal, states both your compulsory excess and your voluntary excess. The policy wording (the full terms document) explains how the excess is applied to different claim types.
The Insurance Product Information Document (IPID), the standardised two-page FCA-required summary for all motor insurance products, also states the excess structure in a consistent format designed to allow comparison between policies. Reading the IPID at quotation allows you to compare excess structures across competing policies before committing.
Key Figures
| Metric | Value | Source | Date |
|---|---|---|---|
| UK avg motor premium Q4 2025 | £622 | ABI | Q4 2025 |
| Standard compulsory excess range | £150-£300 | Market standard | 2026 |
| Young-driver additional excess (typical) | £200-£500 on top | Market standard | 2026 |
| ABI avg motor claim cost (approx) | ~£3,500 | ABI | 2025 |
| Road Traffic Act 1988 minimum | Third Party Only | legislation.gov.uk | 2026 |
| IPT standard rate | 12% | HMRC / gov.uk | 2026 |
| FCA IPID requirement | All motor policies from Oct 2018 | FCA | 2018 |
| BIBA broker finder | biba.org.uk/find-insurance/ | BIBA | 2026 |
Windscreen excess: the separate glass claim excess
Most motor insurance policies carry a separate, lower excess specifically for windscreen and glass claims. Where a standard Comprehensive policy has a main excess of £500 (compulsory plus voluntary), the windscreen excess is typically £75 to £100 for a full replacement, and £0 for a chip repair.
The lower windscreen excess exists because windscreen incidents are both common and relatively low-cost, a chip repair costs the insurer £50 to £100, and applying a £500 main excess to every windscreen incident would effectively make the glass cover unusable for most claims. The separate windscreen excess structure preserves the utility of glass cover while still encouraging policyholders to self-assess whether a claim is worthwhile.
The windscreen excess applies specifically to glass replacement claims. ADAS-equipped modern vehicles require recalibration after windscreen replacement, this recalibration cost may be covered under the windscreen claim terms with some insurers, or may require a separate enquiry. Confirm with the insurer whether ADAS recalibration is included when the windscreen excess terms are provided. Insurance Premium Tax at 12 percent (HMRC, gov.uk) applies to all motor insurance premiums; excess amounts are not affected by IPT. BIBA-registered specialist brokers (biba.org.uk/find-insurance/) can compare excess structures across multiple insurers for policyholders seeking a specific excess arrangement.
Frequently Asked Questions
What is a policy excess on car insurance?
A policy excess is the amount you contribute to any claim before the insurer pays the rest. It has two components: the compulsory excess (set by the insurer, not reducible) and the voluntary excess (chosen by you at quotation to reduce your premium). Both are deducted from every claim settlement.
Do I pay my excess even if the accident was not my fault?
Where the at-fault driver's insurer accepts full liability and manages the claim directly, your own policy excess typically does not apply. Where you claim under your own policy and the at-fault party's liability is disputed or unresolved, you may need to pay the excess upfront and recover it later through the subrogation or uninsured loss recovery process.
Can I reduce my compulsory excess?
No. The compulsory excess is set by the insurer and is a condition of cover. To access a lower compulsory excess for the same risk profile, compare quotes from multiple insurers, different underwriters apply different compulsory excess structures.
What happens if my repair bill is less than my total excess?
If the total repair cost is less than your total excess (compulsory plus voluntary), the insurer pays nothing. The claim is effectively self-funded. This situation is worth being aware of before making a claim, consider whether making a formal claim is worthwhile for repairs close to or below the total excess level.
Where can I find my excess amount?
Your excess amounts are stated in the policy schedule, the personalised document issued at inception. The Insurance Product Information Document (IPID) also states the excess structure. Check both documents rather than relying on memory of the figure you selected at quotation.
| ✓ Editorial Process How we verified this ABI Motor Insurance Premium Tracker Q4 2025 and average claim cost data confirmed at abi.org.uk. FCA IPID requirement confirmed at fca.org.uk. Road Traffic Act 1988 section 143 confirmed at legislation.gov.uk. HMRC IPT rate confirmed at gov.uk. BIBA broker finder confirmed at biba.org.uk. Young-driver excess structure confirmed against FCA ICOBS and market policy documentation. Last fact-checked 26 April 2026. |
Sources & Verification
- ABI Motor Insurance data: https://www.abi.org.uk
- FCA, Insurance Product Information Document: https://www.fca.org.uk
- Road Traffic Act 1988, section 143: https://www.legislation.gov.uk/ukpga/1988/52
- HMRC Insurance Premium Tax: https://www.gov.uk/guidance/insurance-premium-tax
- BIBA, Find a specialist broker: https://www.biba.org.uk/find-insurance/
- FCA Register: https://register.fca.org.uk
- gov.uk, Driving without insurance: https://www.gov.uk/vehicle-insurance/penalty-for-driving-without-insurance
This article is for informational purposes only and does not constitute financial advice. Always verify rates with official sources before making any financial decision.