An excess is a contribution you are required to pay towards a claim you make on your car insurance policy. An insurer may have many types of excesses that can apply in different situations or apply concurrently.
Choose an excess that reduces your car insurance premium
Most insurers will allow you to increase your excess to reduce your premium. This is one of the most effective ways to save on your car insurance costs. However this also means that when you do make a claim, you will have to pay more towards it. It’s easy to be carried away by the potential savings to bank on the hope that you will never have to make a claim. But you don’t want to be left out of pocket when something does go wrong. This makes it important to only select a level of excess you can afford.
Insurance companies can reduce your premium when you increase your excess because this shifts some risk from the insurer back to you. Essentially when your excess is increased it saves insurers from having to pay out numerous small claims.
What are the different types of excess?
The type of excess you are liable for are listed on your certificate of insurance. We have listed the main types of excesses that may apply for comprehensive car insurance below. However not every policy has the same types of excess and they don’t all apply in the same situations either. Refer to your certificate of insurance for more details on your excesses.
This is the amount you agree to contribute towards the making of all claims. It may apply by itself or with another type of excess.
The age excess usually applies in addition to the basic excess if the driver is under the age of 25 and makes a claim. Sometimes insurers apply different excess amounts for drivers of different ages under 25 years as well.
Age; Unlisted driver excess
This is a type of age excess that applies when the driver is under 25 years of age and is not listed under the policy.
Age; Inexperienced driver excess
This applies if the driver is over the age of 25 but has held a drivers licence for less than 2 years.
Sometimes an insurer may have an excess payable upon special circumstances or due to vehicle reasons that are additional to the standard excess.
When don’t I have to pay an excess?
Most insurers waive the excess if you were not at fault and you can provide the name and address of the person who was. You don’t pay because your insurer will be able to claim their costs back from the person who was at fault. This also means that when no one is at fault the excess cannot be waived. For instance if your car was damaged during a flood, or while it was parked then you will still be required to pay a basic excess. Of course you can add extra coverage to your policy so that you won’t have to pay any type of excess for certain claims.
Nothing in this car insurance comparison service should be taken as constituting personal advice. It has been prepared without taking account of your objectives, financial situation or needs. Before you buy a car insurance policy you should consider whether it is right for you. Whilst policy features are listed here, it is only a summary and does not describe all policy details. Be sure to read the insurer's Financial Services Guide and Product Disclosure Statement before deciding to buy. Quotes are estimates of premiums of our participating providers. As with all insurance premiums, these are subject to underwriting and may change. See InfoChoice's Financial Service Guide. InfoChoice Pty Ltd ABN 93 061 105 735 AFSL No. 349445