How does excess work with car insurance?
Asked by: Janice Toy DVM | Last update: August 28, 2025Score: 4.2/5 (60 votes)
Do you pay excess before or after?
In general: If your vehicle can be repaired, you'll pay the excess to the garage when repairs are finished. If your vehicle is beyond economical repair and is considered to be what's called 'a total loss', the excess will be deducted from the settlement value of your vehicle.
Is it better to pay excess or not?
Purely based on likelihood of risk, paying extra excess when you do end up claiming insurance will usually^ be cheaper cumulatively over all the years that you drive a car, than paying extra in premiums.
How does excess insurance coverage work?
It kicks in if the business exceeds the coverage limits of the underlying policy. For example, if your general liability insurance limit is $1 million and you're sued for $1.5 million, an excess liability policy would cover the $500,000 that's not covered by your underlying general liability insurance.
What does $1000 excess mean?
An excess is the part of an insurance claim (in dollars) which you are responsible for paying if you make a claim. An excess is sometimes referred to as a 'deductible' as it is deducted from the amount your insurer will pay for your claim.
What is car hire excess?
Do I pay excess if I am not at fault?
You pay the excess in the event of any claim made on your insurance policy regardless of who is to blame. However, if it's proved the accident was the other person's fault and the full cost is recovered from their insurer, you may be able to recover this amount.
Do you pay excess before or after repair?
You pay your car insurance excess when you make a claim on your car insurance policy, on a per-incident basis. This means you need to lodge a claim and pay an excess for each separate incident. In most cases, for example if repairs need to be made to your vehicle, you will need to pay the excess before work can begin.
Who pays the insurance excess?
Insurance excess is the amount you have to pay towards the total cost of an insurance claim. It's usually a pre-agreed amount. Your insurer will then contribute the rest – up to the limit of the cover. You'll see insurance excess on insurance products like travel, motor, home, and health.
Does insurance excess get refunded?
Paying excess for a car accident that isn't your fault
If your insurance company have dealt with the claim, they should claim the excess back for you.
What is the purpose of excess in insurance?
In insurance, the excess is the initial amount you, as the policy holder, must contribute towards a claim before your insurance coverage kicks in. So before your insurance company pays for any damages, you first pay out of pocket.
Is insurance excess worth it?
Raising Your Voluntary Excess: The Pros
By opting for a higher excess, you may see significant savings on your insurance costs. This can be especially beneficial for those with a low-risk profile or a history of few claims, as they are less likely to need their insurance coverage frequently.
Can you pay off your excess?
Normally, a car insurance excess is paid as a lump sum, not in instalments. If you can't pay it as a lump sum due to financial hardship, you can ask us whether you might be entitled to assistance. If you are, we may give you longer to pay the excess or allow you to pay it in instalments, for example.
Do I have to pay if I hit someone's car?
Hitting a parked car is the same as any other kind of car accident when it comes to key issues like fault and insurance coverage. If no insurance covers the incident, the driver who hit the parked car will personally be on the financial hook for any resulting vehicle damage.
When should I pay excess?
1. The excess amount is the first amount payable by you when your claim is settled or paid out. 2. It serves to motivate you to be more responsible, to take better care of your valuables and to prevent small, petty claims.
Do I lose my no-claims bonus if I have an accident?
If one policyholder makes a claim and loses some or all of their no claims bonus, it doesn't affect the other policyholders. However, if you're the policyholder and a named driver on your policy has an accident, it will affect your NCB.
How does excess protection work?
Excess protection should pay out regardless of whose fault the accident was. Your insurer should also reimburse you even if they cannot claim back expenses from a third-party (for example, the other driver's insurer). Policies will usually cover claims you make, and claims made by a named driver.
Do I pay excess if not at fault?
Your insurer will require you to pay your own policy excess
If you make a claim through your own insurance company, their process requires you to pay your own policy excess. This is the case, even if the accident wasn't your fault.
What does an excess policy cover?
Excess insurance covers a claim after the primary insurance limit has been exhausted or used up. Reinsurance is a way of an insurer passing policies to another insurance company to reduce the risk of claims being paid out.
What happens if no one is at fault in an accident?
But what will happen if no one is at fault for your car accident? You can always file a no-fault car insurance claim. The insurance provider will compensate the policyholder and its passengers for the cost of minor injuries and loss of income regardless of who caused the accident.
Do I get my excess back?
You can and should get any excess you had to pay out, recovered from the at-fault driver's insurer. However, depending on the complexity of your claim, this can take anything from a couple of months to several months to be returned. We know of drivers sometimes having to wait over a year to get their excess back.
How much do you pay for excess?
An excess is an amount that you must pay towards each claim you make. An example: Imagine your car is damaged in a covered accident and needs $3,000 of repairs. If your policy has a $500 excess, then you'll need to pay the $500 excess and your car insurance will cover the remaining $2,500 for the cost of repairs.
What is the minimum excess in insurance?
The compulsory excess is the minimum amount that you'll pay towards a claim. It's set by your insurer when you take out your policy and will be in your policy documents. The amount of compulsory excess you pay can vary depending on the cover you're making a claim on.
What if my car is too expensive to fix?
If the cost of repairs exceeds the car's value, it's probably best to get a new car instead. Sometimes, when a car with high mileage needs a significant repair or if your car is totaled, you might consider replacing it with a new or used vehicle.
How to get out of paying excess?
You should explain that you are in financial difficulty and cannot currently afford to pay the excess but that your claim is otherwise covered by your policy.
How is your excess decided?
The excess versus premium reduction calculation is one that insurers work on diligently, with a lot of analysis going into determining the reduction in premium versus the quantum of claims. In simple terms, they look at how often bad things happen and how much it costs to fix them.