What is the average excess on car insurance in the UK?

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In the UK, the average voluntary car insurance excess chosen by drivers is approximately £300.

📊 Breakdown of Car Insurance Excess

Your total car insurance excess is the sum of two parts: a mandatory amount set by your provider and an optional amount you choose yourself.

  • Compulsory excess: Set by your insurer based on risk factors like your age and car type; typically ranges from £0 to £250+.
  • Voluntary excess: Chosen by you to lower your yearly premium; averages around £300, with common ranges between £100 and £500.
  • Total combined excess: The final amount you pay out-of-pocket during a claim (Compulsory + Voluntary).

💡 Strategy and Risk Management

  • Lower Premiums: Raising your voluntary excess can reduce your annual quote by up to 27%.
  • Out-of-Pocket Risk: A higher excess makes small claims unaffordable if repair costs are lower than your total excess.
  • Affordability Rule: Pick a voluntary excess you can comfortably pay immediately during an emergency.

What happens if I have an excess of 500 pounds on my car insurance?

An excess of £500 means you must pay the first £500 of any approved car insurance claim out of your own pocket.

How It Works During a Claim

  • Out-of-pocket cost: If you make a claim, you pay £500, and your insurer pays the remaining cost above that amount.
  • Payment method: You usually pay the £500 directly to the repair garage, or the insurer deducts £500 from your total cash settlement payout.
  • Small damages: If the damage to your car costs less than £500 to fix, you cannot claim the repair costs from your insurer because the bill is lower than your excess. You still need to report the incident if required by your policy.
  • Larger claims: If your repair bill is £2,000 and your excess is £500, your insurer pays £1,500 and you cover the remaining £500.

What Comprises Your £500 Excess

  • Compulsory excess: This is a fixed amount set by your provider based on your age, car type, and driving experience.
  • Voluntary excess: This is an extra amount you choose to add when buying your policy to lower your overall yearly or monthly premium. Your total excess is the sum of both numbers combined.

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.

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.

Why is British car insurance so expensive?

Car insurance in the UK is expensive because the cost for insurers to process and pay out claims has surged dramatically due to inflation, advanced vehicle technology, and higher repair expenses.

According to the House of Commons Library, quoted prices jumped significantly following the pandemic as traffic returned to normal levels and economic pressures mounted.

Main Industry-Wide Reasons

  • Higher Repair and Technology Costs: Modern cars use complex sensors, cameras, and integrated tech that require specialized labor, parts, and recalibration after even minor collisions.
  • General Inflation: The price of raw materials, energy, vehicle parts, and garage labor has gone up across the board.
  • More Traffic and Claims: Road usage returned to pre-pandemic highs, increasing the frequency of accidents and the total volume of claims insurers must handle.
  • Taxes and Legal Fees: Policies include a standard 12% Insurance Premium Tax (IPT), and insurers must factor in large injury compensation payouts and the cost of covering uninsured drivers via the Motor Insurers' Bureau.

Personal Risk Factors

If your individual quote is exceptionally high, MoneySuperMarket notes that insurers view certain profiles as higher risk based on specific data points:

  • Age and Experience: Younger and inexperienced drivers face the highest premiums because they are statistically more likely to be in an accident.
  • Location: Living in an area with high rates of traffic, vehicle theft, or vandalism increases your postcode risk.
  • Car Insurance Group: High-performance or luxury cars cost more to repair or replace, pushing them into higher insurance groups.
  • Occupation: Certain job titles are deemed higher risk by statistical modeling.

Car Insurance excess explained - GIO

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.

Is it worth paying voluntary excess?

Paying a voluntary excess is worth it if the money you save on your insurance premium is higher than the extra risk you take on, and you can comfortably afford to pay the total amount if you have an accident.

How Voluntary Excess Works

  • Extra cost: Your voluntary excess is the amount you choose to pay on top of your insurer's fixed compulsory excess when you make a claim.
  • Lower bills: Opting for a higher voluntary excess usually lowers your yearly or monthly insurance quote.
  • Diminishing returns: Raising your voluntary excess past a certain point (like £250 or £500) often stops lowering your insurance price very much.

Pros of a Higher Voluntary Excess

  • Cheaper upfront price: Your regular insurance payments cost less.
  • Stops tiny claims: It discourages you from making small claims that could ruin your no-claims bonus.

Cons and Risks

  • Higher claim costs: If you crash, your total bill (compulsory plus voluntary excess) might be huge.
  • Wasted claims: If the damage repair costs less than your total excess, your insurance pays nothing at all.
  • No savings: Sometimes, changing the voluntary amount barely changes the price of the policy.

Is it right for you?

  • Yes, if: You are a safe driver with emergency savings to cover the total excess if the unexpected happens.
  • No, if: A sudden repair bill would cause you major financial stress.

What is the most common excess for 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.

Do I pay excess if I'm not at fault?

You generally do not pay an excess if you are not at fault, provided you can identify the other driver and your insurer confirms they can recover the costs.

When You Don't Pay an Excess

  • Details are provided: You have the other driver's full name, address, phone number, and vehicle registration.
  • Clear liability: Your insurance company agrees the other driver is 100% at fault and accepts liability tracking.

When You Might Have to Pay Initially

  • Missing details: The other driver drove off (a hit-and-run) or refused to give their information.
  • Uninsured driver: The person who hit you does not have car insurance.
  • Unresolved fault: It is unclear who caused the crash, so your insurer asks for the fee upfront while they investigate. If they later prove you were not at fault, they usually refund this money.

What does $5000 excess mean?

A $5,000 excess (also known as a deductible) is the fixed amount of money you must pay out of pocket toward an insurance claim before your insurance company pays the rest.

How It Works in a Claim

  • If damage costs less than $5,000: You must pay the entire repair bill yourself, because the cost does not exceed your excess amount. Making a claim is not financially helpful here.
  • If damage costs $8,000: You pay the first $5,000 out of pocket, and your insurance provider covers the remaining $3,000.

Why Choose a $5,000 Excess?

  • Lower Yearly Payments: Selecting a high excess like $5,000 means you take on more risk, which lowers your regular insurance bill (your premium).
  • High Out-of-Pocket Risk: You should only choose a $5,000 excess if you have $5,000 saved and available to spend immediately in an emergency or accident.