Can someone explain compulsory excess to me?

HappyHammy

Feel like a complete idiot here but I am confused about compulsory excess for car insurance.

My compulsory excess is £75 so does that mean if I make a claim that I have to pay that amount out of my own pocket or will it be applied to my insurance payments? Google wasn't much help with this.

Sandtree

Excess is payable when you make a claim (other than a third party only).

Compulsory excess is what it says on the tin, something you don't have any choice about

Voluntary excess is an additional amount you can choose to commit to pay when you take the policy out in exchange for lower premiums (in theory at least, if you go for exceptionally high excesses it can actually increase premiums)

MalMonroe

HappyHammy said:

Feel like a complete idiot here but I am confused about compulsory excess for car insurance.

My compulsory excess is £75 so does that mean if I make a claim that I have to pay that amount out of my own pocket or will it be applied to my insurance payments? Google wasn't much help with this.

Yes. You pay that £75 yourself. Which is well worth it if the damage caused was, say, £1000 or more. Sometimes you can elect to pay more of an excess in order to bring the premiums lower. 

molerat

MalMonroe said:

HappyHammy said:

Feel like a complete idiot here but I am confused about compulsory excess for car insurance.

My compulsory excess is £75 so does that mean if I make a claim that I have to pay that amount out of my own pocket or will it be applied to my insurance payments? Google wasn't much help with this.

Yes. You pay that £75 yourself. Which is well worth it if the damage caused was, say, £1000 or more. Sometimes you can elect to pay more of an excess in order to bring the premiums lower. 

Or elect to pay more of an excess to make the premiums higher, funny old thing is motor insurance.

400ixl

Go under the expectation you will have to pay the excess when the insurer accepts the claim. Sometimes they will not take it up front and process it as part of the payout, but go on the worst case assumption.

PinkPanther3

Excess is the amount payable in the event of a claim. Compulsory excess is the minimum excess a company will allow you to set. You can also add a voluntary excess which can reduce your premium. For example- Compulsory XS £100 voluntary XS £100, in the event of a claim you will pay £200.

Note some companies will also apply additional excesses in certain scenarios too, eg if a young driver crashes, or in the event of Escape of Water claims on home insurance, refer to your policy documents for specific info.

WHILE I AM A PRODUCT EXECUTIVE FOR A MAINSTREAM INSURER ANY OPINIONS OFFERED ARE NOT TO BE TAKEN AS FORMAL ADVICE, AS EACH COMPANY HAS DIFFERENT METHODS AND TERMS