What Is a Car Insurance Excess and How Does It Work?

Written by Ankit Sureja
Reviewed by Tim Bailey
7 min read
Updated: 8 Sep 2026
Car Insurance Guides
What Is a Car Insurance Excess and How Does It Work?

A car insurance excess is the amount you agree to pay towards a claim before your insurer pays the rest. If you have a £500 repair bill and a £100 excess, you pay £100 and the insurer covers the remaining £400, based on the example given by the Association of British Insurers (ABI).

Your total excess is usually made up of two parts: a compulsory excess set by the insurer, and a voluntary excess you choose yourself. Together they shape both what you pay after an accident and what your policy costs upfront. Around 88-89% of quotes on Free Price Compare are for comprehensive cover, and understanding excess is one of the clearest ways to control the price of that cover.

This page explains how car insurance excess works, how much you might set, when you pay it, and the situations where you can get it back or avoid claiming altogether.

Quick Answer: What Is a Car Insurance Excess and How Does It Work?

  • Your total excess = compulsory excess (fixed by the insurer) + voluntary excess (chosen by you). You pay both when you claim on your own car.
  • A higher voluntary excess usually lowers your premium, because you agree to cover more of any claim yourself (ABI guidance).
  • You normally pay the excess even when the accident was not your fault, but your insurer can reclaim it from the at-fault driver and refund you.
  • If your repair costs less than your excess, it is usually not worth claiming (Citizens Advice) – pay for the repair yourself and protect your no-claims bonus.
  • The average UK comprehensive premium was £560 in Q1 2026, according to the ABI Motor Insurance Premium Tracker – adjusting your excess is one lever to influence your own price.

Last updated: September 2026

Written by the Free Price Compare editorial team | Reviewed September 2026

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How does car insurance excess work?

Car insurance excess works as your share of a claim: when you make a claim on your own vehicle, the insurer deducts the excess and pays the rest. On a £500 claim with a £100 excess, the ABI illustrates that the insurer pays £400 and you cover £100. The excess exists so that policyholders carry part of the risk, which keeps small, frequent claims from pushing premiums up for everyone.

Excess normally applies per claim, not per year, so a second separate claim means a second excess. It usually applies only when you claim for damage to your own car under comprehensive or third-party fire and theft cover. If someone else is fully liable and their insurer settles the whole claim directly, you may not pay anything, but the safest assumption is that you pay first and recover it later.

Comprehensive cover is the level most drivers choose, and on Free Price Compare it accounts for around 88-91% of actual purchases (Free Price Compare data, Jan-Jun 2026). Because it covers your own vehicle as well as third parties, the excess is the figure you are most likely to encounter when you claim.

Compulsory excess vs voluntary excess

Your total car insurance excess is made up of a compulsory excess and a voluntary excess, and you pay both when you claim. The compulsory excess is set by the insurer and cannot be changed; the voluntary excess is an amount you choose to add on top. Add them together and you have the sum you contribute to any claim on your own car.

  • Compulsory excess: fixed by the insurer based on your risk profile, car and any young or newly qualified drivers. You cannot remove or reduce it.
  • Voluntary excess: chosen by you when you buy or renew. Set it to £0 or raise it. A higher voluntary excess usually reduces your premium, according to ABI guidance, because you take on more of the claim.

Example: if your compulsory excess is £150 and you add a £200 voluntary excess, your total excess is £350. On a £900 repair, you pay £350 and the insurer pays £550. When you compare quotes, both figures should be shown clearly, so check them before you buy.

See how changing your excess affects the price

How much voluntary excess should you pay?

The right voluntary excess is the highest amount you could comfortably pay in one go after an accident, without leaving yourself short. Raising it lowers your premium, but only helps if you can actually afford the total excess when a claim happens. Setting a £500 voluntary excess to save on the premium is a poor choice if you could not find £500 plus the compulsory excess at short notice.

A practical way to decide is to weigh the yearly premium saving against the extra you would pay on a claim. If pushing your voluntary excess up saves a modest amount each year but adds several hundred pounds to any claim, the saving may not be worth it for a driver who claims occasionally. Drivers with a strong claims-free record and healthy savings often benefit most from a higher voluntary excess.

It also helps to think about your car’s value. Around 43-48% of Free Price Compare car insurance quotes are for a vehicle worth between £1,000 and £5,000 (Free Price Compare data, Jan-Jun 2026). On a lower-value car, a large excess can approach the amount you might reasonably claim, which reduces how useful a claim would be. Our guide to whether increasing your excess really saves money works through this in more detail.

How much voluntary excess should you pay

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Do you pay the excess if the accident wasn’t your fault?

You usually still pay the excess even when the accident was not your fault, then your insurer tries to recover it from the at-fault driver’s insurer. Once your insurer recovers the money, the excess is refunded to you. This can take weeks or months while liability is agreed, so you should budget for paying it in the meantime.

If the other driver admits fault and the details are clear, some insurers or claims-handling arrangements let you avoid paying the excess upfront, but this is not guaranteed. Where liability is disputed, expect to pay first. If the other party is uninsured or untraced, recovery can be harder, though the Motor Insurers’ Bureau exists to help settle claims involving uninsured drivers.

Legal cover, if included on your policy, can support recovering your losses. Because rules on paying and reclaiming the excess vary between insurers, check the policy wording and confirm the process with your insurer before you commit to a claim.

What happens if the repair costs less than your excess?

If your repair costs less than your excess, it is usually not worth claiming, because the insurer would pay nothing and you would still lose part of your no-claims bonus. Citizens Advice advises checking your excess before you claim precisely for this reason: a £250 dent repair against a £350 total excess means you pay the full cost anyway and gain nothing from the claim.

In these cases, paying for the repair yourself often works out cheaper overall. You keep your no-claims bonus intact, you avoid the claim showing on your record, and you sidestep a possible premium increase at renewal. A single fault claim can affect your future price for several years, so a small self-funded repair can be the more economical route.

Get a repair quote first, compare it against your total excess, and only claim if the shortfall the insurer would cover is meaningful. If you are weighing up longer-term costs, our tips on saving money on car insurance cover the trade-off between claiming and protecting your discount.

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A no-claims bonus is a discount insurers give for each consecutive year you do not make a claim, and it works alongside your excess to shape the cost of cover. Every fault claim can reduce your no-claims bonus and raise your premium at renewal, which is why the size of your excess matters when you decide whether a claim is worthwhile.

Your no-claims record has a large effect on price. On Free Price Compare, around 16-19% of quotes come from drivers with 20 or more years of no-claims bonus, while roughly a third come from drivers with none (Free Price Compare data, Jan-Jun 2026). Many insurers let you pay to protect your no-claims bonus, so an at-fault claim does not reduce it, though a protected bonus does not stop your base premium rising.

Because the average comprehensive premium was £560 in Q1 2026, according to the ABI Motor Insurance Premium Tracker, and repair costs continue to rise, keeping a clean claims record is one of the strongest ways to keep renewals affordable. Combining a sensible excess with a protected no-claims bonus gives you control over both what you pay now and what you pay after a claim.

Why is car insurance excess sometimes so high?

A high car insurance excess is usually a reflection of higher assessed risk, a lower-value or higher-repair-cost vehicle, or a driver profile that insurers price cautiously. Insurers set a larger compulsory excess for younger or newly qualified drivers, certain car groups, and some claim types such as windscreen or fire and theft, because those claims are more frequent or more expensive to settle.

Rising repair and parts costs are part of the picture. The ABI has reported that motor premiums held broadly stable into Q1 2026 while the cost of repairs continued to climb, which pushes some insurers to set higher excesses to manage claim costs. Specialist or high-value cars, and vehicles with advanced driver-assistance technology assessed by bodies such as Thatcham Research, can carry higher repair bills that feed into excess levels.

You cannot change a compulsory excess, but you can shop around, because different insurers set it differently for the same driver. Comparing across a panel of 130+ insurers on Free Price Compare lets you see where the combined excess and premium works best for you. If a recent conviction is pushing your figures up, our page on reducing car insurance costs after a driving conviction may help.

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Excess after a write-off or total loss

If your car is written off, the insurer deducts your total excess from the settlement figure they pay you. A write-off, or total loss, is when the insurer decides repairs would cost more than the car is worth or the vehicle is unsafe to repair. You still pay your excess in this situation, so on a £4,000 valuation with a £350 total excess you would receive £3,650, subject to the policy terms.

The exception is a non-fault write-off where the other driver is fully liable: your insurer can reclaim the excess from the at-fault party’s insurer and pass it back to you once recovered. If you have Guaranteed Asset Protection or a new-car replacement clause, check how the excess interacts with those before assuming the payout.

Because a total loss involves the full value of the car, it is worth checking that your policy’s valuation basis and excess are clear before you need to claim. Comparing cover, valuation terms and excess together, rather than headline price alone, gives a truer view of value. Our questions to ask when comparing car insurance quotes can help you check the right details.

Excess after a write-off or total loss

FAQs about car insurance excess

Do I pay the excess upfront or is it deducted from the claim?

It depends on the claim type. For repairs, you usually pay the excess directly to the repairer or garage when the work is done. For a settlement payout, such as a write-off or theft, the insurer deducts the excess from the amount they pay you. Always confirm the method with your insurer before work begins.

What is a normal car insurance excess in the UK?

There is no single set figure, because insurers set the compulsory part based on your risk, car and driver profile, and you choose the voluntary part yourself. Total excesses commonly fall somewhere in the low hundreds of pounds for a typical driver, but younger drivers and higher-risk profiles often see higher compulsory amounts. Check both figures on every quote before you buy.

How many car insurance claims can I make in a year?

Most standard car insurance policies do not set a fixed limit on the number of claims per year, so you can usually make more than one if separate valid incidents occur. However, each fault claim can reduce your no-claims bonus and increase your premium at renewal, and each claim on your own car carries its own excess. Multiple claims may also affect whether an insurer offers to renew.

Does a higher voluntary excess really lower my premium?

Yes, raising your voluntary excess usually reduces your premium, because you agree to cover more of any claim yourself, according to ABI guidance. The saving varies by insurer and your circumstances, and there is a point beyond which extra excess brings little further reduction. Only set a voluntary excess you could afford to pay if you had to claim.

What is car hire excess insurance and is it different?

Car hire excess insurance is a separate product that reimburses the excess you would pay on a hire car if it is damaged or stolen. It is unrelated to your own car insurance excess and to your no-claims bonus, so making a claim on it does not affect your normal policy. Standalone annual excess cover is often cheaper than buying it at the hire desk.

Can I set my voluntary excess to zero?

Many insurers let you set your voluntary excess to £0, leaving only the compulsory excess to pay when you claim. This gives you the lowest out-of-pocket cost at claim time but usually means a higher premium. Whether it is worth it depends on how likely you think you are to claim and how much the premium rises.

Will making a claim always increase my premium?

A claim, particularly a fault claim, often increases your premium at renewal and can reduce your no-claims bonus, but the effect varies by insurer and claim type. Non-fault claims where costs are fully recovered from the other party may have a smaller impact, though they can still show on your record. If a repair costs little more than your excess, paying yourself often protects your price better.

Do I pay an excess for a windscreen claim?

Windscreen and glass claims usually carry their own separate excess, which is often lower than your main accident excess, and some policies charge no excess for a repair rather than a replacement. The exact amount is set out in your policy schedule. Many insurers treat glass claims separately, so they may not affect your no-claims bonus in the same way as an accident claim.

What happens to my excess if the other driver was uninsured?

If the at-fault driver is uninsured, you would normally still pay your excess when claiming on your own comprehensive policy. Recovering it is harder, but the Motor Insurers’ Bureau helps handle claims involving uninsured or untraced drivers. Some policies include an uninsured driver promise that refunds your excess and protects your no-claims bonus if you can prove the other driver was at fault.

Is it worth claiming for a small dent or scratch?

For minor damage, it is often not worth claiming, because the repair may cost less than your total excess and a claim can reduce your no-claims bonus and raise your renewal price. Get a repair quote first and compare it against your excess. If the shortfall the insurer would cover is small, paying for the repair yourself is usually the cheaper long-term choice.

Can I reclaim my excess after a non-fault accident?

Yes, if the accident was not your fault and liability is accepted, your insurer can recover your excess from the at-fault driver’s insurer and refund it to you. This process can take weeks or months while the claim is settled, so you should be prepared to pay it in the meantime. Keeping evidence such as photos and the other driver’s details speeds up recovery.

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Information correct as of 4 September 2026. Prices, tariffs, policy details and providers change frequently, so please check the latest details before making a decision. This article is for general information only and does not constitute financial advice. Free Price Compare is authorised and regulated by the Financial Conduct Authority (FCA).

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