Motor Insurance Excess: How to Choose Between Compulsory and Voluntary
Your motor insurance excess is the amount you pay toward every claim before the insurer pays the rest. Setting it correctly — not too high, not too low — can save hundreds of pounds over the life of a policy. This article explains how excess works and how to set it.
Compulsory vs voluntary excess
Every motor policy has two excess components, and your total out-of-pocket cost on a claim is their sum:
Compulsory excess
Set by the insurer. You cannot change it. It reflects the insurer's view of your risk — young or inexperienced drivers typically face higher compulsory excess. It applies to every claim regardless of your voluntary choice.
Example: £200 compulsory
Voluntary excess
Chosen by you. A higher voluntary excess reduces your premium — but it means you pay more on every claim. Choose based on what you can genuinely afford to pay out of pocket if you had a claim next month.
Example: £300 voluntary
How to calculate whether a higher excess is worth it
Raising your voluntary excess from £100 to £400 might save £80/year in premium. But you now have an extra £300 to pay on any claim. Break-even: if you go more than 3.75 years without a fault claim, you're ahead. The longer your claim-free record, the more attractive a higher excess becomes.
The calculation also depends on how your no-claims bonus is affected. If a small claim would cost you two NCD steps and hundreds of pounds in future premiums, you may not claim it anyway — in which case the higher excess costs you nothing extra while still saving premium.
For a full framework on this decision, see our guide on when to claim vs pay yourself. For how the excess interacts with the deductible concept in other markets, see the glossary.
Common excess mistakes
- Setting excess higher than your liquid savings. If your total excess is £800 but you only have £200 in accessible funds, you cannot complete a claim without financial stress.
- Forgetting it applies to non-fault claims. You may have to pay the excess and wait for recovery before you get it back — which can take months.
- Ignoring named driver excess. Some policies apply a higher compulsory excess when a named driver (especially a young one) is the driver at the time of the claim. Check the policy schedule carefully.
- Treating excess as "always worth maximising". For drivers with modest savings, a moderate voluntary excess (£150–£250 above compulsory) often offers the best balance.
Motor excess FAQ
Frequently asked questions
- In most cases, yes — your total excess (compulsory plus voluntary) applies to any claim you make on your own policy, including non-fault claims where the other driver is at fault. If full recovery is made from the third-party insurer, your insurer should refund the excess. But if recovery fails or is partial, you may be left out of pocket. This is one reason why setting a very high voluntary excess needs careful thought — it increases your exposure on non-fault claims too. See our guide on what to do after a motor accident.
- Compulsory excess for young or inexperienced drivers reflects the statistical claim frequency and severity for that group. Insurers charge a higher compulsory excess partly to deter small claims that are expensive to handle relative to their size, and partly because the group's risk profile justifies additional policyholder contribution. Young drivers often also have a voluntary excess added on top — meaning the total can be £500–£1,000+ on a minor claim. See our guide to young driver insurance for strategies.
- Some insurers allow mid-term adjustments to voluntary excess; others require you to wait until renewal. Adjusting during the policy term may incur an administration fee, and the premium saving or increase will be applied pro-rata for the remaining policy period. It is generally most efficient to review your excess level at renewal when all other terms are being set simultaneously.
- Many comprehensive motor policies include a separate, lower excess specifically for windscreen claims — typically £25–£75 — or waive the excess entirely if the windscreen is repaired rather than replaced. This separate windscreen excess often does not affect your no-claims discount. Check your policy schedule for the specific windscreen claim conditions, as they vary significantly between insurers.