What is car insurance excess and how does it work?
If you make a car insurance claim, you may need to pay an excess – your share of the claim cost. The amount can depend on your policy, the type of claim and who was driving. Here’s a simple guide to what it means and how it works.
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A car insurance basic excess is the amount you agree to contribute towards the cost of a claim. The insurer then pays the rest of the repair or replacement cost, in line with your policy.
For example:
- Your basic excess is $700
- You have an accident and repairs cost of $4,000
What happens:
- You pay $700
- The insurer pays $3,300
Why do I need to pay a basic excess?
Basic excesses are a standard part of car insurance. They can help balance the cost of cover between what you pay in premiums and what you may need to pay if you claim – while still protecting you from larger, unexpected expenses.
Many policies let you choose your basic excess. Choosing a higher excess may reduce your premium, but it means you will have to contribute more if you make a claim. When choosing your excess, think about what you would be able to contribute at short notice in the event of a claim.
Some situations carry a higher risk of claims – such as younger or inexperienced drivers. Additional excesses may apply in these cases.
Additional excesses
As well as your basic excess, you can also choose additional excesses based on your circumstances, such as who will be driving. Any additional excesses (for example an under 25 excess) is usually at a fixed cost set by your insurer.
Types of car insurance excess and how they work
Before choosing your policy, it helps to understand the different types of excesses that might apply.
Basic excess
In most cases, this is the standard amount you pay each time you make a claim. If the accident wasn’t your fault, you won’t be charged the basic excess, subject to certain criteria.
Voluntary excess
An optional higher excess you choose which can lower your premium, but means you’ll pay more if you make a claim.
Under 25 excess
An additional excess if the driver is under 25.
Inexperienced driver excess
An additional excess if the driver has less than two years’ experience, even if they’re over 25.
Your policy will include a basic excess, and you may choose to add a voluntary excess to reduce your premium.
Sometimes more than one excess can apply to the same claim. For example, if a driver under 25 is driving your car and has an accident, both the basic and under 25 excesses may apply.
Related article: What is comprehensive car insurance?
How do you pay an excess?
Your insurer will let you know how to pay your excess. You may need to pay it directly to the repairer, or it may be deducted from your claim payment. Usually, you’ll need to pay the excess when your claim is approved, often before repairs are carried out.
Can your basic excess be waived?
In some cases. For example, if your insurer agrees you weren’t at fault in a car accident, and you can give them the at-fault driver’s name and address, your basic excess might be waived.
Key takeaways
- An excess is the amount you may need to pay when you claim
- Your excess amount is listed in your policy documents
- More than one excess might apply to a claim
- In some cases, your insurer may waive your excess
Related article: Understanding car insurance
Where to find out more
If you aren’t sure about your excesses or how they work, or need to make a claim, your QBE claims officer will be happy to help. At the heart of it, helping you through your car insurance claim is what we’re all about.
Make a claim online or call 133 723