Car insurance excess, explained.

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.

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."

Peta Taylor

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

• Can I adjust my excess?

  Yes, most insurers allow you to choose a higher or lower excess when setting up your policy.

• Will I have to pay an excess if my car is stolen?

  Yes, unless your policy states otherwise, you will typically need to pay the excess for theft claims.

• Do I have to pay my excess for storm damage claims?

  Yes, most comprehensive insurance policies require an excess for weather-related claims unless stated otherwise in your policy.

• Do I have to pay my excess if I hit a kangaroo?

  Yes, animal collisions usually require you to pay the standard excess.

Written by

Peta Taylor

Publisher of Insurance

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