What's an Excess in Insurance — and Should You Raise It?

The excess (sometimes called a 'deductible') is the amount you agree to pay out of your own pocket each time you make an insurance claim. Your insurer pays the rest — up to your policy's limit.

For example: if your car needs $3,000 in repairs and your excess is $700, you pay $700 and your insurer pays $2,300.

Basic vs voluntary excess

Most policies include a basic (compulsory) excess set by the insurer — you can't change it. Many policies also let you add a voluntary excess on top of that, in exchange for a lower premium.

Some policies also add age-based or inexperienced driver excesses on top of your standard excess. Always check these before you buy — they can be surprising.

Should you raise your excess?

Raising your excess can significantly reduce your premium — sometimes 10–25% for a modest increase. But it only makes sense if:

• •You have the cash available to pay the higher excess if you need to claim
• •You don't expect to make frequent small claims
• •Your vehicle or assets are high value and you'd definitely claim for major damage

When a lower excess is worth paying for

If you're tight on cash, a lower excess gives you peace of mind that a claim won't wipe you out. It also makes sense if you're in a high-risk situation — new driver, older car, high-hail area.