An excess is a set sum of money that you agree to pay in the event of an insurance claim. This is paid towards the cost of any claim that you make. It is also payable for every claim that you make. If you were unlucky enough to have your car broken into and repairs done that required claiming on your insurance to pay for and then two months later are involved in a road accident, then you would have to pay the insurance excess twice in order to get your vehicle repaired.
Is an excess always the same?
There are two different types of insurance excess that you may find on your insurance policy – voluntary excess and compulsory excess. Often you will only have one or the other on your insurance policy, but there are occasions when you may have both. This is always worth double checking as you will have to pay both excesses if you have a compulsory and voluntary excess.
You can often set the amount that you pay as an excess as well, some people opting for a higher excess rather than a lower one.
Why choose a higher excess?
Having a higher excess on your policy can reduce the cost of the insurance premium so that it is cheaper over the course of the year, but in the event of an accident or other need to make a claim, it will cost you more.