An insurance excess is the amount you pay out of your own pocket towards a claim before your insurer covers the rest. Most UK policies include a compulsory excess (set by the insurer) and give you the option to add a voluntary excess (which you choose) to lower your premium. Typical compulsory excess amounts range from £100 to £500 for motor cover and £50 to £250 for home and contents policies, though this varies by insurer, policy type and your circumstances. Choosing the right excess means balancing the premium savings from a higher excess against your ability to pay that amount if you need to claim.

What Is an Insurance Excess?

The excess is a fixed sum you agree to pay when you make a claim. If your claim costs less than the excess, you pay the full amount yourself and the insurer pays nothing. If the claim costs more than the excess, you pay the excess and the insurer pays the remaining cost.

Most policies have two types of excess. The compulsory excess is the minimum amount set by the insurer based on factors such as your age, the type of cover and the risk they assess. The voluntary excess is an additional amount you choose to add, which reduces your premium because you are taking on more of the financial risk yourself.

For motor insurance, young or newly qualified drivers often face higher compulsory excess amounts (commonly £300 to £500 or more) because insurers view them as higher risk. Home and contents policies typically have lower compulsory excess levels, often £50 to £150, though this can be higher for specific risks such as subsidence or flood cover.

Typical Excess Amounts in the UK

According to consumer guidance from MoneyHelper, typical compulsory excess amounts in the UK are:

  • Motor (third party, fire and theft or comprehensive): £100 to £500, with higher amounts for drivers under 25 or with less than two years’ driving experience.
  • Home buildings insurance: £100 to £250, sometimes higher for specific perils such as subsidence (often £1,000 or more).
  • Home contents insurance: £50 to £150.

Voluntary excess options usually start at £0 (no voluntary excess) and go up in increments of £50 or £100, commonly up to £500 or £1,000. Adding a £250 voluntary excess to a motor policy can reduce your premium by 10 to 20 per cent, though the exact saving depends on the insurer and your circumstances.

How to Choose the Right Excess

The right excess level depends on your financial situation and how likely you are to claim. A higher total excess (compulsory plus voluntary) will lower your premium, but it means paying more out of pocket if you do claim.

Consider what you could comfortably afford to pay in an emergency. If a £500 excess would cause financial difficulty, opt for a lower voluntary excess even though your premium will be higher. If you have savings and rarely claim, a higher voluntary excess can make sense because you keep the premium savings year after year.

Also factor in your claims history. If you claim frequently, a high excess could cost you more overall than the premium savings. If you have not claimed in years and keep a no-claims bonus, a higher excess often pays off.

When You Pay Your Excess

You pay the excess when you make a claim, not when you buy the policy. For motor insurance, if you claim for accident damage and your vehicle is repaired by an approved garage, the insurer will typically deduct the excess from the settlement and pay the garage the balance. If you receive a cash settlement, the excess is deducted from the amount you are paid.

For home insurance, the process is similar. If a tradesperson repairs damage, the insurer pays them directly and deducts your excess. If the insurer issues a cash payout, they subtract the excess first.

If your claim is not your fault and the insurer recovers the full cost from a third party, you may get your excess refunded, though this is not guaranteed and policies vary.

Next Steps

When comparing policies, check both the compulsory and voluntary excess options and calculate the total excess you would pay per claim. Use comparison sites to see how different voluntary excess levels affect your premium, and read the policy wording and key facts document to confirm any specific excess amounts for particular risks (such as windscreen claims on motor policies or escape of water on home cover). If you are unsure which excess level suits your circumstances, speak to an FCA-authorised insurance adviser who can assess your personal situation.

Financial Disclaimer: This article provides general information about insurance excess in the UK and is not regulated financial advice. We are not authorised by the Financial Conduct Authority. Excess amounts, policy terms and premium savings vary by insurer and by your individual circumstances. Before choosing an excess level or purchasing a policy, read the policy wording and key facts document carefully and consider speaking to an FCA-authorised insurance adviser for guidance tailored to your personal situation.