Voluntary excess is an optional claim amount you add to your compulsory excess, often to lower your insurance premium.
Voluntary excess is the extra amount you choose to pay towards an insurance claim. It is added to the compulsory excess, which is set by the insurer. MoneyHelper explains that an insurance excess is the part of a claim you pay yourself.
For example, if your compulsory excess is £250 and you choose a voluntary excess of £250, your total excess is £500. If you make a valid claim, that amount would usually be taken off the claim payment or paid by you as part of the claim process.
A higher voluntary excess may reduce your insurance premium. This is because you agree to pay more of any claim yourself. But may not always be the best choice. MoneyHelper says a higher excess can lower the price, but you should think about whether the saving is worth the higher claim cost.
You should only choose an amount you can afford if you had to claim. For car insurance, MoneyHelper warns that your payout may be lower after both voluntary and compulsory excesses are deducted, and you may need to pay the excess up front for some claims in its car insurance guidance.
Voluntary excess can apply to car insurance, van insurance, home insurance and landlord insurance. The exact rules depend on the insurer and the policy wording.
On home insurance, you may have different excesses for different parts of the policy. For example, buildings cover and contents cover may not have the same excess. Some claims may also have a higher excess. MoneyHelper notes this in its guide to buying home insurance.
Subsidence is a common example. The ABI says many buildings policies have a higher subsidence excess, so it is important to check the policy terms before you buy.
Before choosing a voluntary excess, check the total amount you may need to pay. This can include:
· the compulsory excess
· the voluntary excess
· any separate excess for windscreen, flood, escape of water, subsidence or accidental damage claims
· whether the excess applies per claim, per person, per item or per policy section
· whether the claim would still be worth making after the excess is deducted. You may still need to report the incident under the terms of your policy, even if you decide not to make a claim.
The Financial Ombudsman Service says an excess should be clear in the policy documents and is part of the insurance contract if it has been properly explained. You can read more in its guidance on policy excesses and limits.
Clear information also matters under FCA rules. Insurance firms must make sure customer communications are clear, fair and not misleading. This means excesses should be explained in a way customers can understand before they buy.
When we arrange insurance, we can help you compare excess options and understand how they may affect your quote. We work with customers looking for car, van, convicted driver insurance, home and landlord cover.
Before you buy, it is worth checking the policy wording and Insurance Product Information Document. You can find insurer documents on our policy documents page.
Voluntary excess can help shape an insurance quote, but it should be chosen with care. A higher amount may reduce the premium, but it can also mean paying more if you claim. Always check the total excess and make sure it is affordable before you take out cover.
