Finance glossary
Excess
Also known as: Voluntary excess, Compulsory excess
In simple terms
The excess is the amount you have to pay towards a claim yourself. If you claim, the insurer takes the excess off what it pays out — so you cover the first part and it covers the rest.
On this page
What does excess mean?
An excess is the fixed amount you contribute towards a claim. There are usually two parts: a compulsory excess set by the insurer, and a voluntary excess you choose to add on top. Added together they make your total excess.
You only pay the excess when you make a claim the insurer accepts — it is not an upfront charge, but it is deducted from any settlement.
How an excess works
When a claim is agreed, the insurer works out the cost of putting things right and then subtracts your excess. For a repair, you might pay the excess to the garage and the insurer pays the balance direct.
Choosing a higher voluntary excess usually lowers your premium, because you are agreeing to shoulder more of any claim yourself. But it also means a bigger bill at exactly the point you need to claim.
How could this affect me?
A high excess can make small claims not worth making — if the repair costs little more than the excess, claiming may cost you a discount and gain you almost nothing. It is worth knowing your total excess before you claim.
Set the voluntary excess at a level you could actually afford in an emergency. A tempting low premium is little comfort if a £750 excess is more than you can find when a claim arises.
Example
A car repair costs £900 and your total excess is £250:
| Repair cost | £900 |
|---|---|
| Your excess | £250 |
| Insurer pays | £650 |
You pay the £250 excess; the insurer covers the remaining £650. Figures are illustrative.
Things to watch out for
- Your total excess is the compulsory plus the voluntary amount — check both.
- A high voluntary excess cuts the premium but leaves you a bigger bill when you claim.
- For small claims, the excess can wipe out most of the payout — and cost you your no claims discount.
- Some policies apply extra excesses (e.g. for young drivers or subsidence).
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- ABI, Understanding insurance excesses (opens in a new tab). Accessed 22 Aug 2026.
- MoneyHelper, What is an insurance excess? (opens in a new tab). Accessed 22 Aug 2026.