Car insurance excess, explained.

Your guide to what an excess is, why and when you’ll have to pay it and the different types to be aware of.

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By

Peta Taylor

Edited by

Joelle Grubb

Updated

Fact checked
4.6 based on 834 reviews

Key takeaways

  • Your car insurance excess is the amount you pay out of pocket before your insurer covers the rest of a claim.
  • You typically won't have to pay your excess if you can prove someone else was at fault.
  • Different types of excesses apply to various claims, more on that below.

What is a car insurance excess?

A car insurance excess is the amount you agree to pay when making a claim before your insurer covers the remaining costs. This is a standard feature of all car insurance policies and it's designed to stop people from making claims for smaller incidents.

Excess vs premium: what's the difference?

Your insurance premium is the amount you pay to maintain coverage, while an excess is the amount you pay when making a claim. Typically, choosing a higher excess lowers your premium, whereas a lower excess results in higher premium payments.

What is a windscreen excess?

A windscreen excess specifically applies to claims related to repairing or replacing your car's windscreen or windows. Some policies offer optional windscreen cover, which can waive the excess for these claims or provide a reduced excess amount. This will typically cost you a slightly higher premium, but in most cases, it's worth it.

When will I have to pay my car insurance excess?

You will generally have to pay your excess when you make an insurance claim where you are at fault or if the responsible party cannot be identified. Unfortunately, even events where you're not really at fault, but no one else can pay the excess, will result in you having to pay the excess - like hitting a kangaroo or other wildlife.

Do I have to pay my excess if someone else hits my car?

If another driver is at fault and their insurance covers the damage, you may not have to pay your excess. However, if they are uninsured or cannot be identified (e.g., in a hit-and-run), you may still need to cover the excess depending on your policy terms. Usually, if you're able to identify the driver, vehicle, license plate and a witness - your insurer won't make you pay.

How do I pay my car insurance excess?

Typically, insurers deduct the excess from the payout amount so you never really get served a bill for it. Of course, different circumstances can change this so always check your product disclosure statement.

Is it better to have a high or low excess?

A high excess can lower your insurance premium, making it a cost-effective choice if you rarely make claims. However, if you anticipate needing to claim or prefer lower out-of-pocket expenses in an accident, a low excess may be more beneficial. The right choice depends on your personal circumstances and budget.

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Our expert says

"If you're trying to lower the cost of your premium, then increasing your excess is a great way to do this. However, you have to do this responsibly. Only increase it by as much as you can afford and if you can, keep the excess amount in a savings account so it's there in case of a rainy day when you need to claim. This can make a challenging time a bit easier to deal with in the moment."

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Publisher of Insurance

What other types of excess exist?

Beyond the standard excess, other types may apply, such as:

  • Age excess: Applies when younger drivers (under a certain age) make a claim. These can be quite substantial in the hundreds to thousands but will vary by insurer.
  • Unlisted driver excess: If someone not listed on your policy drives your car and has an accident, this excess may apply.
  • Special excess: Some policies include additional excesses for high-risk vehicles, specific claims, or modified cars.

FAQs

To make sure you get accurate and helpful information, this guide has been edited by Joelle Grubb as part of our fact-checking process.
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Written by

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Peta Taylor is a publisher at Finder, working across all of insurance. She's been analysing product disclosure statements and publishing articles for over 2 years. Peta is passionate about demystifying complex insurance products to help users make well educated decisions with confidence. Peta is part of Finder's insurance awards team and works alongside editorial and insights experts to bring users the best insurance products every year. See full bio

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2 Responses

    Sam's avatar
    SamSeptember 28, 2021

    My car was scratched by some one when it was parked i took it to repair body and they asked for $1500 to fix it
    It have comprehensive insurance ($900 excess)
    Should i go through insuranceor just do it out of my pocket?

      James Martin's headshotFinder
      JamesOctober 6, 2021Finder

      Hi Sam,

      I’m sorry to hear that. It’s really up to you to decide this. Some people choose not to file a claim against minor damages that cost under, the same or a bit more than the amount of their excess. Whichever option you decide is best for you, keep in mind that you may need to tell your insurer about the accident, to avoid invalidating your cover at a later date.

      Regards,
      James

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