What is the average excess for car insurance?

Editorial team Published on

The average car insurance excess (known as a deductible in the U.S.) is $500, with $1,000 being the next most common selection.

📊 Common Excess Options

  • $250 or Less: Higher monthly premiums, lower out-of-pocket costs during claims.
  • $500 (Average): Standard baseline balance for collision and comprehensive coverages.
  • $1,000+: Lower monthly premiums (10% to 20% savings), higher out-of-pocket costs.

💡 How Excess Works in Practice

  • Application: Applies to collision and comprehensive claims (e.g., crashes, theft, or vandalism).
  • Exclusion: Does not apply to standard third-party liability coverage.
  • Math Example:
    • Damage cost: $2,000
    • Excess/Deductible: $500
    • You pay: $500
    • Insurer pays: $1,500

What is the average excess on car insurance?

The average total car insurance excess in the UK typically ranges between £250 and £500, combining a mandatory insurer-set amount with an optional driver-chosen amount.

Breakdown of Car Insurance Excess

Car insurance excess is the money you agree to pay toward a claim. Your total excess consists of two parts:

  • Compulsory Excess: Set by your insurer. You cannot change it. It depends on your age, car type, and driving history. Young or inexperienced drivers often face higher compulsory amounts. A typical baseline is around £200.
  • Voluntary Excess: Chosen by you. Adding an extra £250 or £500 here usually lowers your overall annual insurance. Typical voluntary choices range from £0 to £500+.

How It Affects Your Costs

  • Higher Voluntary Excess: Lowers your yearly policy price, but increases your out-of-pocket risk during an accident.
  • Total Excess Limit: If a repair costs less than your total combined excess, you cannot claim it through your insurance.

You can read more about how optional amounts work on the Howden Insurance Guide or check provider details via Allianz.

What is a good excess amount for car insurance?

A good voluntary excess (deductible) amount is typically between £200 and £300, as this balance usually lowers your annual premium without making a claim impossible to afford.

Car insurance excess is split into two parts:

  • Compulsory excess: A fixed amount set by your insurance provider that you cannot change.
  • Voluntary excess: An extra amount you choose to pay on top of the compulsory excess to lower your monthly or annual insurance bill.

How to Choose the Right Amount

  • Look at your savings: Choose an excess amount that you can easily pay out of pocket right away if you get into an accident.
  • Find the sweet spot: Raising your voluntary excess past £250 or £300 often brings diminishing returns, meaning the extra discount on your insurance premium stops being worth the high risk.
  • Check the total: Always add your compulsory excess and voluntary excess together. If your total excess is £700, you must pay the first £700 of any at-fault repair bill before your insurance pays a single penny.

Is 200 too much for car insurance?

Paying $200 a month for car insurance is close to the national average for a full-coverage policy, but it may be high if you only carry minimum liability.

Average Costs

  • Full coverage: The national average is about $176 to $209 per month ($2,100 to $2,300+ per year). A $200 monthly rate is typical or slightly below average for comprehensive protection.
  • Minimum coverage: State-minimum liability usually averages around $50 to $60 per month. If you pay $200 for basic liability only, you are likely paying much more than average.

When $200 a Month is Normal

  • Your coverage level: You have robust full coverage (comprehensive and collision) with low deductibles.
  • Your driver profile: You are a teen or young driver, have a recent ticket or accident on your record, or have poor credit history.
  • Your location: You live in a high-cost state (like California, Florida, or Texas) or a dense urban ZIP code with heavy traffic and high crime rates.
  • Your vehicle: You drive a brand-new, expensive, or financed car that costs more to repair.

When $200 a Month is Too Much

  • You have a clean driving record and drive an older, paid-off car.
  • You live in a low-cost rural state with cheap insurance rates.
  • You only hold basic state-minimum liability.

If you want to check if you can get a better price, WalletHub and Insure.com suggest shopping around and comparing quotes from at least three different companies.

What does it mean if my insurance excess is $500?

If your insurance excess is $500, it means you must pay the first $500 of any approved claim you make, and your insurance company will pay the rest.

How It Works in Practice

  • Example: If your car or property suffers $2,000 worth of damage, you pay $500 out of pocket, and your insurer pays the remaining $1,500.
  • Small Damage: If the repair cost is less than $500 (such as a $300 dent), you must pay the full amount yourself, meaning it is usually not worth filing a claim.

Key Things to Know

  • When you pay it: You typically pay the $500 directly to the repair shop before your car is fixed, or the insurer deducts it from your total payout if your car is written off.
  • Fault exceptions: If you are in a car accident that is completely someone else's fault and you can provide the other driver's valid details (like their name, phone number, and license plate), your insurer will often waive your excess.
  • Extra fees: Your $500 is usually your basic excess. Additional fees (like an age excess for drivers under 25) might get added on top of that $500 if a young or unlisted person was driving during the incident.

How Much Car Insurance Do I Actually Need?

9 related questions found

Is it better to have low or high excess?

Whether a low or high excess is better depends on your budget, driving habits, and ability to pay out-of-pocket during an emergency. An excess is the amount of money you agree to pay toward an insurance claim before your provider covers the rest.

High Excess

  • Lower payments: Your regular monthly or annual insurance premium costs less.
  • Best for safe drivers: Ideal if you rarely make claims and want to save money on fixed costs.
  • Higher risk: You must pay a large amount of cash immediately if you get into an accident.

Low Excess

  • Higher payments: Your regular insurance premium costs more each month or year.
  • Smaller claim costs: You pay very little out-of-pocket if your property gets damaged.
  • Best for tight budgets: Ideal if you cannot afford a sudden, large cash bill in an emergency.

Why is my excess so high?

Your insurance excess is high because insurers view you as a higher risk or because you selected a high voluntary amount to lower your monthly GoCompare payments.

An insurance excess is the money you agree to pay toward a claim before your insurer pays the rest. Your total excess combines a compulsory excess (set by the insurer) and a voluntary excess (chosen by you).

Why Your Compulsory Excess is High

  • Young or New Driver: Drivers under 25 or with less experience face higher compulsory fees because they are statistically more likely to crash.
  • Vehicle Type: Driving a high-performance car, an imported vehicle, or a car with expensive parts increases the repair risk for insurers.
  • Location: Living in an area with high rates of theft, vandalism, or traffic accidents drives up your mandatory risk level.
  • Driving History: Previous claims or driving convictions signal higher risk to insurance companies.
  • Rising Market Costs: General inflation, expensive modern vehicle technology, and rising repair costs have caused overall industry excesses to increase.

Why Your Voluntary Excess is High

  • Lowered Premiums: You or a previous policy holder may have chosen a high voluntary amount (such as £500 instead of £250) to make the annual or monthly insurance bill cheaper.

How much excess should I pay?

You should choose the highest voluntary excess you can comfortably and realistically afford to pay out of pocket if you need to make a claim.

Insurance excess consists of two parts:

  • Compulsory excess: The fixed amount set by your insurer that you cannot change.
  • Voluntary excess: The extra amount you choose to pay on top of the compulsory excess to lower your regular insurance bill (premium).

How to Decide Your Voluntary Excess

  • Check your savings: Pick an amount you could pay right away without causing money trouble or debt.
  • Weigh the savings vs. risk: A higher voluntary excess (such as £500) makes your yearly or monthly policy cheaper. However, if you have an accident or damage, you must pay that total amount before the insurer pays the rest.
  • Look at claim sizes: If the total cost of repair is less than your total excess (compulsory plus voluntary), your insurer will not pay anything. Setting too high of an excess means small claims are entirely your responsibility.

You can test different amounts using price comparison tools like MoneySuperMarket to see how much changing your voluntary excess alters your overall quote.

What does excess of 500 mean?

An insurance policy with an excess of 500 means you must pay the first 500 units of currency (such as dollars or pounds) of any claim out of your own pocket, and your insurance company pays the rest.

How an Excess of 500 Works

  • Your Share: If you file a claim, you pay the initial 500.
  • The Insurer's Share: The insurance provider covers any remaining costs above 500 up to your policy limit.
  • Example: If your car or home repairs cost 2,000, you pay 500 and your insurer pays 1,500.
  • Small Claims: If the damage costs less than 500, you cannot make a claim because the repair cost is less than your excess.

Types of Excess

  • Compulsory Excess: A mandatory amount set by your insurance provider based on risk factors like age or driving history.
  • Voluntary Excess: An extra amount you voluntarily agree to pay on top of the compulsory excess to lower your regular insurance bill (premium).

Is it worth having excess on insurance?

Having an insurance excess is worth it if you want to lower your regular insurance payments, but only if you can comfortably afford to pay that amount out of pocket when you make a claim.

An excess (or deductible) is the first amount of money you agree to pay toward an insurance claim before your provider pays the rest. It consists of a compulsory excess set by the insurer and an optional voluntary excess you choose yourself.

How Excess Affects Your Costs

  • Lower Premiums: Agreeing to a higher voluntary excess means you take on more risk, which usually reduces the cost of your regular insurance bill (the premium).
  • Diminishing Returns: Raising your voluntary excess too high stops saving you much money. Insurers cap how much they lower your price past a certain threshold (often around £500).
  • Higher Claim Costs: If an accident or damage happens, you must pay both the compulsory and voluntary excess combined before you get any payout.

When a Higher Excess Makes Sense

  • You have enough emergency savings to pay the total excess amount immediately without facing financial hardship.
  • You are a safe driver or low-risk policyholder who rarely or never makes a claim.
  • The savings on your annual premium are large enough compared to the extra risk you take on.

When a Higher Excess Is a Bad Idea

  • You cannot easily afford the combined total of compulsory and voluntary excess in an emergency.
  • The cost of the damage to your property is lower than your total excess, meaning you cannot claim anything anyway.
  • Making a small claim might cause you to lose your no-claims discount, making it cheaper to fix minor damage yourself. You can read more about balancing costs on MoneyHelper or compare quotes and rules with guidance from Which?.