What is a car insurance excess?

When it comes to your car insurance excess, there are two main types – the compulsory excess and the voluntary excess.

Let’s take a look at both types.

What is a compulsory excess?

As the name suggests, a compulsory excess is the amount of money you have to pay if you make a claim on your policy. This is the minimum you have to pay out of pocket. The exact amount varies, and a wide range of factors go into working out your exact figure.

These factors include:

• The type of car you drive
• How old the car is
• How old you are
• How experienced behind the wheel you are

These are just some of the factors that insurers take into account when working out your compulsory excess. But, bear in mind this is by no means an exhaustive list. You can usually find your excess within your policy documents.

What is a voluntary excess?

The voluntary excess is an optional excess that you can sometimes choose to pay in addition to your compulsory excess when you take out a policy. But, if you commit to it when you buy your policy, you will normally be expected to pay it in the event of a claim.

Now, why would you choose to pay extra in the event of a claim? Well, many people do it to bring their overall annual premium down.

When you’re comparing quotes, you can generally play around with different voluntary excess amounts to see how your overall premium will change. Generally, the higher the voluntary excess, the lower the premium.

But, before you take out a voluntary excess to lower your premium, think about whether that makes sense for you. Remember, even if you’re the safest driver in the world, sometimes you’ll need to make a claim.

Cars get stolen. Cars get vandalised. Cars get written off. And if you make a fault claim on your policy, you’ll likely need to pay your car insurance excess.

And then, you’ll need to be able to cover your total excess when you claim. Your total excess is made up of your compulsory excess and any voluntary excess(es). Basically, when you add all applicable excesses together, you get the total excess you’d need to pay in the event of a claim.

If you’re unsure you’ll be able to cover this total amount and decide to explore other options instead, there are lots of other ways to lower your premium that don’t involve breaking the bank.

Depending on your circumstances, your insurance company might apply other types of car insurance excess to your policy.

Some common car insurance excesses include driver specific excess, vehicle specific excess, glass or windscreen excess, and fire and theft excess.

What is a driver specific excess?

The driver-specific excess typically applies to policies where there are multiple drivers, but can apply on policies with just one driver.

This driver might be expected to pay a larger excess if they make a fault claim. That’s because, for whatever reason, the insurer has deemed them to be at higher risk of an incident. Here are some circumstances where an insurer might impose a driver-specific excess:

• They’ve only had their licence for a few months
• They’re under a certain age – sometimes 25
• They’ve got points on their licence

This is a non-exhaustive list, but it illustrates some of the factors that might deem a specific driver “high-risk”.

If this happens, the main driver on the policy may still benefit from a lower excess, while the additional driver might have a higher driver-specific excess to offset that risk.

What is a vehicle specific excess?

Typically, your compulsory excess will take into account the type of car you’re driving. This means your car’s risk profile will be baked into the compulsory excess.

Although not common, in some instances, an insurer might charge an additional vehicle specific excess – or simply split a vehicle specific excess out. This might happen if you’re driving a particularly luxurious or powerful car that is deemed higher-risk by your insurer.

What is a windscreen excess?

If you look through your policy wording, you might find that your glass and windscreen-specific excess is different from your compulsory excess.

Many fully comprehensive annual policies come with windscreen cover as standard. Alternatively, you may be able to purchase this as an add-on. This cover still includes an excess, but it’s typically lower than your compulsory excess. Please note, it is very unusual for temporary insurance policies, including those provided by Zixty, to have windscreen cover.

Also, your exact windscreen excess might vary depending on the repair work required. You might have a smaller (or no) excess to pay if you simply need to fix a crack on your windscreen. But, your excess might be higher if your whole windscreen needs replacing.

What is a fire and theft excess?

Another type of excess you may have heard about is the fire and theft excess (if you have, you get bonus points). This excess usually only applies to specific third-party car insurance policies.

Third-party car insurance policies generally only cover damage to the other driver’s car. On some occasions, they might also cover fire and theft. These types of policies are often known as third-party fire and theft policies.

You won’t pay your excess unless you make a claim. But with a third-party, fire and theft policy, you would normally only make a claim in the event of theft and fire. As such, your excess would only cover a fire and theft situation, hence the fire and theft excess.

So when exactly does the excess come into play? Generally, you’ll need to pay an excess every time you make a claim if the incident is deemed to be your fault.

Let’s say you rear-end someone at a traffic light. You decide to make a claim for the repairs. The insurer decides you’re at fault. You have a total excess of £500. The repairs are going to cost £1,500.

In this scenario, typically, your insurer will pay £1,000 and you’ll be charged an excess of £500 to cover the remaining amount. So, as you’ve most likely worked out, choosing a high excess could mean you have to fork out money – over and above your insurance premium.

But, you won’t usually need to pay the excess if you claim and the incident isn’t your fault. That normally means there is a third party involved, they have valid car insurance, and they’re clearly at fault. In some instances, your insurer may still charge you the excess and then pay you back if they manage to recover the money through the other party’s insurers.

Finally (and we’re nearly there) if your car is written-off, and you’re due to get a settlement from your insurance company, the amount that you receive may be reduced by the amount of your combined excess. So, assuming you were due to get £5,000 for your pride and joy after you left it in a farmer’s field, and your total excess was £500, you would receive £4,500.

Do I have to pay my excess if an uninsured driver hits me?

It might seem a bit unfair that you have to suffer the consequences if an uninsured driver hits you and you decide to claim. Especially if they are clearly at fault.

In some circumstances, your no-claim discount will be affected and you might be expected to pay the full excess to have your claim processed. That’s because it’ll usually fall to your insurer to cover the costs associated with a claim involving an uninsured driver.

But, the Motor Insurance Bureau allows you to claim against an uninsured or “hit-and-run” driver. This is a last-resort measure you could use to receive some compensation if you’re in this situation.

Do I have to pay an excess if my car is stolen?

If your car is stolen, and your insurer agrees to process your claim, you’ll probably still need to pay your excess. That’s because a claim is a claim. And, as you’re probably figuring out by now, most car insurance claims come with an excess.

Your insurer will likely agree to process your claim if:

• You’ve reported the theft to the police
• You took reasonable care to ensure your car is safe
• Your policy covers theft

If your car isn’t recovered, it will likely be “written off”. If it is written off, your insurer will pay out their estimate of the market value of the car. But, they’ll usually deduct your excess from this pay out.

So let’s say your insurer estimates your car is worth £4,000. But, you owe a £500 excess. The insurer will likely pay out £3,500.

Do I have to pay my excess if my car is stolen and then recovered?

Let’s say your car is stolen. The police find it – yay! But, you still need to tell your insurer that your car has been stolen. You will usually need to answer a few more questions, like whether any crimes have been committed using the car, for instance.

Also, if the car has suffered any damage and you wish to claim, you will typically still need to pay an excess.

And, if the damage is severe and your car is written-off, your insurer will likely deduct your excess from any payout you receive.

Okay, so, we know what you’re thinking. There are no benefits, whatsoever. You’d do away with it if you could. It’s just another expense you need to budget for, etc. We don’t blame you.

But, your car insurance excess isn’t all bad.

For one thing, a higher excess generally means a lower car insurance premium. Your higher excess could save you money if you don’t make any claims in a particular year.

Also, an excess generally means you might avoid making smaller claims on your car insurance. This will benefit you in the longer term, because it’ll help you build your no claim bonus which could shave hundreds off your premium in the longer term.

So, yes, a car insurance excess might seem like an annoying short-term expense. But from a longer-term perspective, it might actually result in a saving! It’s all about that silver lining, right?

What happens if you can’t afford your excess?

Let’s say you’ve made a claim and you’ve been told you’ll need to pay a total excess of £500 towards the cost of repairs. But, if you’re one of the 34% of adults in the UK who have either no savings or less than £1,000 in savings, this may be a tough pill to swallow.

So what do you do if you can’t afford your excess? Well, the first step is to talk to your insurer. They may have a policy in place to deal with the situation.

While in some cases, they may be unable to process your claim at all, in others they may be able to offer you an installment plan to help you cover your excess.

Failing that, they may be able to pay out the amount minus the excess to help towards the repairs, allowing you some time to find the money or to come to an arrangement with the garage itself.

If you’re worried about not being able to afford your excess in the event of a claim, it might be a good idea to look into protecting it with a special insurance policy or add-on.

What does it mean to protect your excess?

Protecting your excess is an add-on some insurers offer. Basically, it’s a way to get some of your money back if you make a claim and need to pay an excess.

Some insurers also offer standalone excess insurance which does a similar thing. It’s designed to let you claim your excess back if you make a valid claim. Some excess protection policies cover one claim per year, while others offer a fixed amount towards your excess.

Protecting your excess could be a good idea if you feel like it’s on the high side. You might have a small emergency fund, but it’s no fun seeing it disappear because of one, single car insurance claim.

With an excess protect policy, you will normally still need to pay your excess in the first instance. You will then be able to claim it back.

While this means you will likely get your money back, you will need to find a way to pay the excess in the short term and claim it back from your insurer at a later date.

It might work well for you too if you’re on the risk-averse side, and want to limit any potential financial losses as much as possible.

But, excess protection add-ons and standalone policies come at an extra cost, so they might not always make sense for you. It’s up to you to weigh up the risks and decide whether it makes sense for you and your financial situation.

Zixty’s temporary car insurance policies come with a clear, simple excess rate that is the same for all customers.

And, if you purchase our Zixty Excess Protect add-on,  you could save £250 if you need to make a fault claim. All you have to do is make a claim, pay your excess as you normally would, and then claim back the amount you’re owed under your Zixty Excess Protect policy.

And Zixty Miles is pretty great anyway, so it’s worth enabling regardless. It allows you to carbon offset all your journeys up to 100 miles a day every day while you’re a customer. Plus, if you enable it, we’ll plant a tree every time you take out a policy with us.

So, to sum up, if you get a Zixty short term car insurance policy and purchase our Excess Protect add-on, you’ll be able to claim £250 back when you pay your excess as long as you have an active policy with us.

Congratulations

If you’ve read this far, congrats! Excesses are one of the most complex parts of car insurance in the UK, and understanding them is key to making smart choices about insurance. Without singing our own praises too much, we’ve kept our approach as clear and transparent as we can. We hope you like it.