what is excess on car insurance

[DiRyan]

Car insurance excess (also known as a deductible) is the fixed amount you agree to pay out-of-pocket toward a claim before your insurance coverage kicks in. It's a standard feature of most policies, designed to share risk between you and the insurer and to discourage small, frequent claims. There are two main types: a compulsory excess set by your insurer and a voluntary excess you can choose to lower your premium.

Think of it like this: if you have a covered accident causing $3,000 in damage and your policy has a $500 excess, you pay the first $500, and your insurer covers the remaining $2,500. The key is that the excess applies per claim.

Choosing your excess level is a financial balancing act. Opting for a higher voluntary excess will typically lower your monthly or annual premium because you're taking on more financial responsibility. However, this means you must be confident you can afford that larger amount if you need to make a claim. A lower excess results in a higher premium but less financial shock at the time of an incident.

It's crucial to understand that the excess only applies to claims under your own comprehensive or collision coverage. It generally does not apply to claims made against your liability insurance when you're at fault for damaging someone else's property or injuring them—their damages are covered by your policy without an excess payment from you. Some policies may also waive the excess for specific situations, like windshield repair.

Scenario	Typical Excess Range	Notes
Standard Compulsory Excess	$250 - $1,000	Varies by insurer, driver age, and experience.
Voluntary Excess (Optional)	$0 - $2,000+	Choosing $0 voluntary excess leads to a higher premium.
Young/Inexperienced Driver	$500 - $2,000	Compulsory excess is often higher for this risk group.
Windscreen Repair/Replacement	$0 - $250	Often has a separate, lower excess or is waived.
Theft Claim	$500 - $1,000	Applies to the comprehensive portion of your policy.
At-Fault Accident	Your full excess amount	You pay the excess to repair your own vehicle.
Not-At-Fault Accident	Often $0	If the at-fault driver is identified, their insurance should cover your costs, including your excess.

[Molly]

It's the chunk of money you have to pay first when you make a claim on your own car. If your repair bill is $2,000 and your excess is $500, you pay the $500 and the insurance handles the rest. You pick this amount when you buy the policy—a higher excess usually means cheaper monthly payments, but just make sure it's an amount you can actually afford to pay if something happens.

[GeorgeLynn]

The excess is your financial responsibility in the event of a claim. It's a fundamental risk-sharing mechanism. I always consider my emergency fund before selecting a voluntary excess amount. A higher excess reduces the premium, but it must be a manageable sum. The goal is to use insurance for significant, unforeseen losses, not minor inconveniences, and the excess structure reinforces that principle.

[JudahRose]

Basically, it's your deductible. You agree to pay a set amount—say, $500—before the insurance company pays anything. It’s a trade-off: if you choose a higher excess, your premium costs less each month. But if you get in a fender bender, you’ll need to have that cash ready. It’s all about finding a balance between what you save now and what you might have to pay later.