Whenever you claim from your car insurance you are required to carry part of the cost of the loss yourself. Excess is the amount that you will have to pay from your own pocket before the insurance company will pay the rest of the claim. Insurance excess is also called “the first amount payable” or the standard excess. You need to familiarise yourself with the excess payable on your car insurance policy; there are different excess amounts payable on the different types of claims. An accident excess will not be the same as that of a broken windscreen, for example.

An additional excess is payable in some instances – again, check your policy. For example, if a person under the age of 25 drove your car at the time of an accident, an additional excess may come into effect. A third type of excess is called a voluntary excess. Your insurance company may give you the choice of a voluntary excess. If you are prepared to pay a higher excess the insurance company may offer you lower monthly premiums. This voluntary excess amount is over and above the standard and additional excess amounts.

If you accept a voluntary excess you must be sure that you will be able to afford this amount in the case of a claim. An idea could be to place the savings you make on the lower premiums into an emergency fund.