9th June 2020

In excess: Insurance policy excesses explained

Older couple reviewing budget

We’re often asked about the excess on a home insurance policy. Here are answers to a few frequently asked questions.

What is an excess?

A policy excess is the amount you have to pay if you make a claim. Excesses are applied to a policy as a way of you accepting a small responsibility for the risk yourself. They usually apply to most sections of a home policy and can vary and be flexible.

Why would I choose a voluntary higher excess?

To put simply, a voluntary higher excess may give you a lower premium. This is usually via an insurer discount of a set percentage of the premium. On a lower premium, a £1,000 excess may save £50 a year, so may not be worth it, but on higher premiums, it can save figures in the hundreds.

In some instances, a higher excess may pay for itself straight away because the premium reduces by more than the voluntary excess. In most instances though, the saving will take a few years.

If you have never claimed, think about how much money you could save over these years by taking a higher excess. That’s money in the bank to put towards a claim, should one happen.

Can I choose to have no policy excess?

You cannot choose a nil excess. A policy excess is there to protect the insurer from smaller claims, which in turn increases premiums, and to protect the you for the same reason.

Some high net worth insurers do not apply an excess to jewellery and fine art claims. This could be a good opportunity to opt for a voluntary excess as this will help keep the premium down.

Why has my insurer imposed a higher excess?

This could be because you have a poor claims history, or it could be that your insurer has deemed you to be a special risk, for example you are in a high risk flood or theft area.

If you would like to know whether the excess on your insurance policy could be reduced, get in touch with us.

What excess should I choose?

Most policies will have a standard minimum excess. Most mid-net worth policies start at a £250 excess, with some high net worth policies starting at a £500 standard excess. It will be your decision whether you stick with the standard one offered with your policy, or whether you decide to take a higher excess to possibly lower your premium.

If you need help making that decision, speak to us. We have the knowledge, understanding and experience to tailor a policy and suggest an excess to suit you. Call 020 8712 8076 or email privateclients@astonlark.com.