If you ever need to make a claim on your car insurance, you’ll usually be required to contribute towards the cost. This contribution is known as your excess.
The total excess you pay is typically made up of two parts: compulsory excess and voluntary excess.
Compulsory excess
Compulsory excess is the amount your insurer sets and applies to your policy. It can’t be changed.
The amount is based on a range of factors, including things such as:
- Your age
- Your driving experience
- The type of vehicle you drive
- Your claims history
Different drivers may have different compulsory excess amounts depending on their circumstances.
Voluntary excess
Voluntary excess is the additional amount you choose to contribute towards a claim.
In general, choosing a higher voluntary excess can reduce the cost of your insurance premium because you’re agreeing to pay more towards any future claim. However, you should only choose an amount you could realistically afford if you needed to make a claim.
An Example
Let’s say:
- Your compulsory excess is £300
- Your voluntary excess is £200
If you make a claim, your total excess would be £500.
That means you would contribute the first £500 towards the claim, and your insurer would cover the remaining amount, subject to your policy terms and conditions.
What should I choose?
A higher voluntary excess may help reduce your premium, but it’s important to strike a balance.
Choosing an excess that’s too high could leave you with an unexpected bill if you need to make a claim, so always make sure you’re comfortable with the amount you’ve selected.
Ready to get a quote?
When getting a quote, you’ll often have the option to adjust your voluntary excess and see how it affects your price.
At Carrot, we help young drivers get on the road with confidence. Our black box technology and Better Driver by Carrot app provide insights into your driving and can help you build safer habits over time. Drivers who achieve a good Driving Score may also have the opportunity to earn a discount at renewal.
Get a quote with Carrot today and explore the cover options available to you.