Excess insurance policies

Protect yourself against expensive excess fees

Protect yourself against expensive excess fees

Recommended by 94% of users**

Recommended by 94% of users**

Compare deals from over 100 providers***

Compare deals from over 100 providers***

Compare quotes for excess insurance

If you're worried about high excess fees when it comes to making a claim on your car insurance, excess insurance will have you covered.

Even though you may pay out hundreds of pounds a year for your car insurance, you may still have to pay out more in the case of an accident, in the form of your policy’s excess.

Excess insurance is designed to cover the cost of your main car insurance plan’s excess. This means that in the case of an accident, you will not have to pay for the cost of your insurance’s excess.

In This Guide:

Excess - What is it?

An excess is a payment that your insurance company will ask you to pay towards any claim that you make. Normally the total sum of your excess will be divided into two parts:

  • Compulsory excess: This sum is set by your insurer and will often vary upon your age and your driving experience. The type of car that you are insuring will also be a factor in deciding how much you will have to pay towards this.
  • Voluntary excess: This is set when you take out an insurance policy. The higher the level of your voluntary excess, the lower the cost of your plan. This can be a good way to lower the initial cost of your insurance policy, but it is worth remembering that in the case of an accident, you will have to pay this amount in full.

How Does Excess Insurance Work?

Excess insurance is a form of insurance that works next to your traditional car insurance policies. This insurance will pay for your excess in the case of an accident. The total amount that your excess insurance will cover varies depending on the amount agreed between you and the insurer.

You choose the upper limit of your excess insurance. The most sensible thing to do is to set it to equal the upper limit of your car insurance’s excess. If you set it higher than that, then you will end up paying higher premiums for an excess limit that you will never reach.

Another option is to set a lower limit to your excess insurance. This will not cover the whole amount of your excess, but it will still go some way to helping you foot the bill.

Types of Excess Insurance

Broadly speaking, there are three primary types of excess insurance available, each catering to different needs and scenarios:

Single Excess Insurance

This type of policy covers the excess you would need to pay in the event of a claim on a specific insurance policy, such as your car insurance. It's particularly useful for individuals who have chosen a high voluntary excess to reduce their premium costs but want to mitigate the risk of having to pay a large sum if they need to make a claim. Single excess insurance ensures that, in the case of an accident or damage, the policyholder is not out of pocket for the excess amount.

Lifestyle Excess Insurance

Lifestyle excess insurance offers a broader coverage, extending across multiple types of insurance policies you may hold. This can include pet insurance, home insurance, and travel insurance, among others. A key feature of this insurance is the aggregate limit applied across all claims within the policy period. For instance, if you have a total excess limit of £300 on your lifestyle excess insurance, and you make a claim where £250 is used to cover an excess, you would only have £50 left for any subsequent claims in the policy year. This type of insurance is ideal for those with multiple insurance policies looking to streamline their excess coverage.

Car Hire Excess Insurance

Useful for those renting vehicles, hire car excess insurance covers the potentially large excess charges imposed by car hire companies in the event of damage or theft of the vehicle. Car hire excess amounts can be substantial, often reaching into the thousands, which can be a significant financial burden if an incident occurs, though some car hire companies offer a collision damage waiver, which can reduce your chances of needing to make a claim in a crash. 

Car hire excess insurance can be purchased independently from the car rental agreement alongside a car hire insurance policy, often at a more competitive rate than what is offered by the rental company itself. This insurance provides peace of mind for travellers and occasional car renters, ensuring that the excess costs associated with rental vehicle claims are manageable.

What Does Car Excess Insurance Not Cover?

When considering excess insurance, the devil is often in the details. It's crucial to thoroughly review your policy's terms and conditions to grasp fully what is covered and what isn't. Here are some nuanced aspects you should be particularly vigilant about:

  • Waiting Periods: Some excess insurance policies incorporate a waiting period from the start date of your policy during which claims cannot be made. This period could range from 14 to 30 days, or possibly longer. Understanding this clause is vital to avoid surprises if an incident occurs shortly after obtaining your policy.
  • International Claims: Planning to drive abroad? Check whether your excess insurance extends to incidents outside your home country. While some policies offer comprehensive international coverage, others might restrict claims to domestic incidents only. If you're involved in an accident abroad, this distinction could significantly impact your ability to claim on your excess insurance.
  • Policyholder Specifics: The name on the excess insurance policy plays a critical role in the coverage scope. Typically, excess insurance is designed to cover policies held in the same name. This means if your car insurance is in your name, but other policies (such as your partner's insurance) are not, the excess insurance may not provide coverage for claims on those other policies. This specificity can limit the utility of your excess insurance, particularly for families or couples with insurance policies under different names.

Is Excess Insurance Worth It?

When it comes to making a claim on your car insurance, you could be in for quite a shock if your excess is high. While increasing your voluntary excess can result in cheaper car insurance, setting it too high can make it unaffordable to even claim in the first place. It’s all about finding the right balance.

However, if you’re concerned about being able to afford to claim, excess insurance cover can be very useful. For just a few extra quid a month, you won’t have to worry about paying any excess as this will now be covered by your insurance provider.

Last reviewed: 1 June 2024

Next review: 1 July 2024