To keep the explanation brief, voluntary excess is an amount that you would have to pay to your insurer when you make a claim in addition to the compulsory excess.
For example, if you make a claim for £1,000 and you have agreed to a voluntary excess amount of £50 and a compulsory excess of £50, then the car insurance provider will keep the first £100 (£50+£50) and £900 will be payable to you.
In This Guide:
- What’s the difference between compulsory and voluntary excess?
- But why would you opt to increase your excess?
- How should I choose the level of my voluntary excess?
- Do I still have to pay car insurance excess if I wasn’t responsible for the accident?
- What is car insurance excess protection – and do I need it?
What’s the difference between compulsory and voluntary excess?
Compulsory excess is set by your insurance provider. This excess amount cannot be changed and will be deducted from a claim that exceeds the excess total.
If you’re a young or inexperienced driver, then it may be that your compulsory excess quote is more than someone who is older or has been driving for a longer. This is because an insurer will deem you more of a risk due to your young age or lack of driving experience.
If you drive a high-performance or luxury vehicle, then your compulsory excess may also be more than average.
How does voluntary excess differ?
Voluntary excess is a non-obligatory amount that you choose to pay on top of the compulsory excess.
When you receive a car insurance quote, we suggest that you look at how changing the voluntary excess affects your monthly premiums.
* Remember to choose a voluntary excess amount that you’re comfortable with. This fee is not negotiable when you make a claim and as such, it needs to be factored into your budget.
But why would you opt to increase your excess?
People opt to pay voluntary access because it can help to save money.
Many insurance providers will offer you a cheaper premium if you agree to pay this sum when you make a claim.
It is appealing to keep the voluntary excess amount at £0 when you take out a new policy for your vehicle, but we would recommend you try out different voluntary excess amounts when getting quotes to see how it affects your monthly premium.
* Just keep in mind that you will be obligated to pay this excess if you do ever need to make a claim.
How should I choose the level of my voluntary excess?
The voluntary excess amount that you commit to will mostly be determined by the disposable income you have access to if the need for a claim arises.
It should be set at an amount that you can comfortably manage to pay whilst taking the inclusiveness of compulsory excess into consideration.
Many younger drivers prefer to avoid voluntary excess because their disposable income and savings are limited. In this case, it’s safer and easier to factor in higher insurance premiums.
Mature drivers, on the other hand, are more likely to have the financial stability to take advantage of voluntary excess and the lower premiums that come with it.
Essentially, the level of voluntary excess you choose (if you choose it at all) is narrowed down due to three factors:
- Your personal preference;
- Your disposable income and;
- Your financial stability.
Do I still have to pay car insurance excess if I wasn’t responsible for the accident?
This is a popular question.
In short, the answer is yes.
However, if the accident was proven to be no fault of your own, then your insurer will try to claim back your excess from the other party’s insurance company.
This money will then be refunded to you once the investigation has been completed.
Be warned that it could take several weeks for your excess to be refunded to you.
You may also want to pay heed to the fact that if the guilty person cannot be identified or does not have insurance, then you may have to pay the excess, regardless of who is responsible for the accident.
What is car insurance excess protection – and do I need it?
Some insurance companies provide a specialised policy called “car insurance excess protection”.
This type of policy will allow you to claim back your excess if you make a claim.
It’s an additional premium that you would have to pay and is typically separate from your insurance agreement.
Car insurance excess protection offers added peace of mind; however, you may end up paying for a product you never use i.e. you never make an insurance claim.
