What insurance excess means

What an excess is

An excess is the amount you agree to pay towards a claim yourself, with the insurer covering the rest. If a repair costs more than your excess, you pay the excess and the insurer pays the remainder.

On most policies the excess applies per claim rather than per year, so two separate claims in the same year would each carry their own excess.

Compulsory and voluntary excess

Most policies split the excess into two parts. The compulsory excess is set by the insurer and applies to every relevant claim — it is part of the policy’s terms rather than something you choose.

The voluntary excess is an amount you chose to add on top when taking out or renewing the policy. It exists because the excess is one of the details of a policy that can be tailored at purchase — the level, and whether to set one at all, stays with you.

The two are added together, so the figure you would actually pay on a claim is the compulsory and voluntary excess combined.

• Compulsory excess — set by the insurer and built into the policy’s terms.
• Voluntary excess — an amount you chose when taking out or renewing the policy.
• The total excess on a claim is usually the two added together.

How the excess interacts with a claim

When a claim is settled, the excess is normally deducted from what the insurer pays out, or paid by you directly — for example to a repairer — before the insurer covers the balance.

Because of this, a claim for less than the excess would leave nothing for the insurer to pay, which is why the excess is sometimes described as the point at which a policy starts to respond.

Some policies describe situations in which an excess can later be recovered or refunded — for example, where someone else is held responsible for the loss. The policy wording explains whether and how this applies.

Why one policy can list several excesses

It is common for a single policy to carry different excesses for different types of claim. A home policy might show one excess for most claims and a different one for a specific risk; a motor policy might treat windscreen damage differently from other damage.

Some policies also add an extra compulsory excess in particular circumstances — for example, for certain drivers on a motor policy. Where this applies, each element is usually listed separately, and the ones relevant to a claim are added together.

Why the excess appears where it does

Insurance paperwork usually splits into two parts: a policy wording, the generic booklet describing how the cover works for everyone, and a policy schedule, which lists the details specific to you.

Because your excess depends on your own policy — the compulsory amounts that apply to you and any voluntary excess you chose — the figures normally live in the schedule rather than the wording. The wording describes how excesses operate; the schedule tells you what yours actually are.

A summary document provided at sale or renewal often repeats the key excesses as well, alongside the main things the policy does and does not cover.

How to find what your excess currently is

You do not need to wait for a claim to find out what your excess is. The figure — or figures — should be visible in the documents you already have and in your account with the insurer.

If the documents are unclear, or you cannot see a figure for a particular type of claim, the insurer can confirm what applies to your policy.

• Your policy schedule — the personalised document listing your cover and excesses.
• The summary document provided when you bought or renewed the policy.
• Your insurer’s app or online account area, which often shows excesses alongside your cover.
• Renewal paperwork, which typically restates the excesses for the new period.

A note on this guide

This guide is general information to help you understand your own contracts. It is not financial advice or a recommendation, and it does not rank or endorse any provider. Every decision about your contracts remains with you. To see how PEAMO surfaces your contracts and renewals, read How PEAMO works.