Excess Insurance Explained
Whether it’s down to voluntary or compulsory excess, making a claim on your car insurance policy is rarely free.
Excess Insurance – sometimes known as Excess Waiver Insurance or Excess Reimbursement Insurance – is designed to cover the cost of your Excess when you make a claim on your Car Insurance policy.
What is an Excess?
A Car Insurance Excess (or any other kind of Excess) is usually split into 2 parts: Compulsory Excess and Voluntary Excess.
What is Compulsory Excess? Sometimes known as a Mandatory Excess, this is the amount that you must pay your insurer when making a claim on your insurance, and it is agreed when you take your Car Insurance policy out.
What is Voluntary Excess? This can be adjusted when you first take out your policy and must be paid on top of your compulsory excess – typically between £250 and £1,000. The higher you set your voluntary excess, the cheaper your car insurance premium should be. This might sound great (and it is at the time of purchase), but if you have to make a claim, you’ll need to pay that Voluntary Excess in full in addition to your Compulsory Excess.
For example, if you take out Car Insurance with a £250 Compulsory Excess and £750 Voluntary Excess, that’s £1000 you’ll probably have to cough up when making a claim.
What is Excess Insurance?
Excess Insurance is designed to cover the excess charged by your insurer when you make a claim. This will be an additional monthly cost or one-off payment, on top of your Car Insurance.
You can decide what percentage of your Excess will be covered when taking out excess insurance, but the more you are covered for, the higher your premium will be.
For example, if your total Excess due after a claim is £800, you can pay for £500 worth of Excess Insurance, meaning you’ll have just £300 to pay in the event of a claim.
Who is Excess Insurance for?
If you are looking to cut costs on your Car Insurance premium, you might want to look at increasing your Voluntary Excess and taking out an Excess Insurance policy to cover you in the event of a claim. This could work out cheaper than taking a lower Excess.
Excess Insurance is an option if you do not think that you would have the means to pay a large lump sum to your insurer in the event of an accident.
But remember, the savings you make by increasing your Voluntary Excess might be insignificant in comparison to the additional cost of your Excess Insurance.
We recommend running different quotes to see if you are able to make savings with different Excess levels. Get a no-obligation, free quote here.
Single Excess Insurance vs Lifestyle Excess Insurance
There are two types of Excess Insurance to choose from: Single and Lifestyle.
Single Excess Insurance is a policy taken out to cover any Excess due on one policy.
Lifestyle Excess Insurance is designed to cover the Excess on any of your insurance policies (car, home, travel and pet insurance to name a few). Be warned though, that the cap that you decided on when taking out an Excess insurance policy will now apply to all of your insurance policies.
If your annual limit is only £500 and you make more than one claim, the chances are that your Lifestyle Excess insurance would not be enough to provide you with full coverage.
Are there any exclusions on Excess Insurance?
As with any other type of insurance, the exclusions applied will vary from policy to policy.
Some insurers may not cover your Excess if you have an accident in another country for example, while most will only pay out if the insurance that you’re paying Excess on is in your name.
You should also check if your Excess Insurance Provider has an age limit, with some refusing to pay out if you are below or above a set age.
Some Excess Insurance Providers will also include time limits as to when you can claim, so be sure to inform your Excess Insurer that you have made a claim on your original insurance policy as soon as possible.
How much does Excess Insurance cost?
Depending on the level of cover you choose, Single Excess Insurance for your car is generally priced between £30 and £60 per year.
Lifestyle Excess Insurance is slightly more expensive and will usually cost anywhere between £45 and £65 per year.
Be sure to shop around using online car insurance comparison sites too, as you may find a cheaper policy. Just make sure that it covers you fully and that you know exactly what you're covered for (and what you're not covered against).
More Excess Insurance FAQs
Where can I get Excess Insurance?
Whether you’re looking for Excess Insurance on a vehicle that you own or one that you’ve hired, you might struggle to find a specialist Excess Insurance Company.
Luckily for you, you can get a quote on Excess Insurance right here with Bobatoo! Just tap the green button below to get your free quote.
Remember, Excess Insurance is not an alternative to Car Insurance – it is simply an additional extra, providing you with extra cover should you need to make a claim.