The most common voluntary excess on car insurance chosen by policyholders is £250. This figure represents the additional amount a driver agrees to pay towards a claim, which is typically on top of any compulsory excess set by their insurer.
Understanding the different types of excess is crucial when dealing with car insurance, as it directly impacts both your premium and the out-of-pocket costs you might face if you need to make a claim. Car insurance policies generally involve two types of excess: compulsory and voluntary.
Voluntary Excess: Your Choice to Save
Voluntary excess is an amount you willingly agree to pay on top of your compulsory excess when you make a claim. By choosing a higher voluntary excess, you are essentially telling the insurer that you are less likely to make small claims, which often results in a lower annual premium for your policy. Our data indicates that a significant majority of customers, specifically 62%, opt for £250 as their voluntary excess amount when obtaining a car insurance quote. This suggests it strikes a widely accepted balance between reducing premiums and managing potential costs at the time of a claim.
Why £250 is a popular choice for voluntary excess:
- Premium Reduction: It's often enough to make a noticeable difference in the annual premium without being an excessively high amount.
- Affordability: For many policyholders, £250 is a manageable sum to pay in the event of an incident, making it a practical choice.
- Deterrent for Minor Claims: It helps discourage making very small claims that might not be worth the administrative hassle or potential impact on a no-claims bonus.
Here's an illustration of typical voluntary excess choices:
| Voluntary Excess Amount | Commonality |
|---|---|
| £250 | Most Popular (Chosen by 62% of customers) |
| £100 | Less common, smaller premium savings |
| £500 | Popular for significantly lower premiums |
| £750+ | Less common, offers substantial premium savings |
Compulsory Excess: The Insurer's Requirement
Compulsory excess is the fixed amount determined by your insurance provider that you must pay towards any claim. This amount is non-negotiable and is set based on various factors, including:
- Your age and driving experience: Younger or less experienced drivers typically face higher compulsory excesses.
- Vehicle type: High-performance, luxury, or frequently stolen vehicles may have higher compulsory excesses.
- Your claims history: A history of previous claims or driving convictions can also lead to a higher compulsory excess.
Unlike voluntary excess, you cannot choose your compulsory excess; it's a condition of the policy dictated by the insurer. While it contributes to the total amount you would pay out of pocket for a claim, it is distinct from the voluntary amount you select.
Understanding Your Total Excess
The total excess payable for an eligible claim is the sum of your compulsory and voluntary excesses. For example, if your insurer sets a compulsory excess of £150 and you have chosen a voluntary excess of £250, you would be responsible for paying £400 towards a claim.
Choosing the appropriate voluntary excess requires a careful balance between achieving a lower premium and ensuring you can comfortably afford the lump sum if an accident occurs. While a higher voluntary excess can lead to cheaper insurance, always ensure it's an amount you can readily access in an emergency. For more in-depth information on how car insurance works, including details on excesses, you can consult reputable financial guides here.
