Excess is the amount you pay toward a claim. Understanding compulsory versus voluntary excess prevents nasty surprises at payout.
Two types on most policies
Compulsory excess is set by the insurer and applies to every claim in that category. Voluntary excess is your choice — raising it usually lowers premium but increases your share of each claim. At claim time, both often stack.
Example: £400 claim with £100 compulsory + £250 voluntary excess → insurer pays £50, you pay £350.
Different excesses for different perils
Escape of water, subsidence, and storm damage may carry higher excesses than standard theft. Check the schedule line by line — a cheap headline excess can hide a £1,000 water excess.
- List each peril category and its excess on one page.
- Model a £500 and a £2,000 claim under each scenario.
- Compare five-year premium savings against one realistic claim.
When a high voluntary excess makes sense
If you have emergency savings and rarely claim, a higher voluntary excess can be rational. If a single burst pipe would strain your budget, keep voluntary excess modest even if premium rises slightly.
Cheap premium plus high excess is a bet that you will never claim. Households with older plumbing often lose that bet.
Younger renters and gadget excess
Some policies apply separate excesses for portable electronics. A cracked phone abroad may fall below combined excess — meaning zero payout. Away-from-home cover and excess should be read together.
Claims history and future excess
After a claim, renewal quotes may rise and some insurers impose higher compulsory excess. Switching providers does not erase claims history held on central databases insurers consult.
Always confirm excess wording on your schedule before purchase.