Excess

The excess is the amount of any claim that you must pay yourself. This is a set amount of money which varies between insurers and policies: typically, the excess is between fifty and one hundred pounds for most claims, but can be as much as one thousand pounds for claims related to expensive situations such as subsidence. The excess effectively dissuades you from claiming on your insurance for every incident that occurs, since you will always pay a part of the repair or replacement. If your home insurance policy has an excess of one hundred pounds, you will have to pay the first hundred pounds of any claim you make: if the value of the claim is only eighty pounds, you will have to pay the whole amount yourself.

In order to reduce your premium you can pay a 'voluntary excess'. This is the amount of the claim that you agree to pay in addition to the mandatory excess. As the cost of claims to your insurer will be reduced, your premium is reduced accordingly. If your property is considered to be high risk by your insurer (for example, if there is a high risk of flooding or subsidence), offering to pay a large voluntary excess can significantly reduce your premium. If you do not think that you will make a claim for any damage or loss valued at under one hundred pounds, you should choose to pay a voluntary excess of at least this amount.

When making a claim, consider whether it is worth the upheaval and expense before you proceed. For example, it is not usually worth claiming for a stolen DVD player worth one hundred and fifty pounds if you have to pay the first one hundred pounds of the claim. Consider your no claims discount too: if your NCD is not protected you will lose your entitlement to a premium reduction.