What Is Excess in Car Insurance?

Everything you need to know so you’re confident when making a claim.

Car insurance comes with many terms that can confuse new and experienced drivers alike, and one of the most important is excess. It directly affects how much you’ll pay if something happens to your car, and it influences the cost of your premium too. Yet many people don’t fully understand what it means, when it applies, and how it affects a claim.

This long-form guide breaks down the meaning of excess, why insurers use it, the different types, and how to choose the right one for your budget. It’s written to be SEO-friendly, easy to read, and detailed enough that any driver will understand exactly what to expect from their policy.

What Does ‘Excess’ Mean in Car Insurance?

Excess is the amount you pay out of pocket when you make a claim. Your insurer then pays the rest of the cost to repair the damage or compensate another party, depending on your cover.

Think of it as the first part of the bill that you’re responsible for.

Example:

If your excess is $800 and your repairs cost $4,500, you pay $800, and your insurer covers $3,700.

It’s that simple in concept, but in practice, different rules and types of excess can apply depending on the situation.

Why Car Insurance Uses Excess

Excess exists for several reasons, and understanding them will help you choose a policy that suits you.

It Keeps Premiums Lower

If insurers paid every small repair bill, premiums would be far higher. Excess helps keep overall costs stable.

It Discourages Minor Claims

Without excess, people might claim for tiny repairs—like a small scratch—costing insurers more and raising premiums for everyone.

It Helps Share Responsibility

You take some financial responsibility, while your insurer covers the rest. This balances risk.

It Allows Policy Customisation

Many insurers let you choose the size of your standard excess, letting you adjust your premium accordingly.

Types of Car Insurance Excess

Most drivers are surprised to learn that excess isn’t just one number. Several types may apply depending on your policy and situation. Understanding these will help you avoid unexpected charges during a claim.

Standard Excess

Also called “basic excess,” this is the main excess that applies to most claims. You can usually choose a higher or lower standard excess when buying your policy.

Higher standard excess = lower premium. Lower standard excess = higher premium

Typical range: $600–$1,200

Age Excess

This applies if the driver involved in the incident is under 25. Younger drivers statistically have a higher accident rate, so insurers add an age excess on top of the standard excess.

Typical amount: $400–$1,700

Inexperienced Driver Excess

A driver may face an inexperienced driver excess even if they’re over 25, if they have held their license for less than a specified period, often two years.

Typical amount: $400–$1,000

Unlisted or Undeclared Driver Excess

If someone who is not listed on your policy drives your car and has an accident, this excess applies. It can be significantly higher than other excesses.

Typical amount: $2,000–$3,000

Special or Additional Excess

Some insurers apply extra excesses depending on conditions such as:

• A driver with prior claims

• Car modifications

• High-risk parking location

• High-performance vehicle

Amounts vary depending on the insurer and vehicle type.

Theft Excess

Some insurers apply a separate excess for theft claims, especially when a car is taken from an unsecured location or parked in a high-risk area.

Windscreen and Glass Excess

Some policies allow:

• Reduced excess, or

• No excess at all

for windscreen-only claims, usually as an optional add-on.

When You Need to Pay Excess

Even if an accident wasn’t your fault, excess rules can be confusing. Below is a clear breakdown of when you’ll be required to pay.

You’ll normally pay excess when:

• You are at fault

• You are partly at fault

• Your insurer cannot recover repair costs from another driver

• You can’t identify the at-fault driver

• You damage someone else’s vehicle or property

• You make a claim for single-vehicle damage

• You hit a parked car, and the owner can’t be found

Even incidents caused by weather, vandalism, or animals may require excess under most policies.

When You Don’t Need to Pay Excess

In many cases, you won’t have to pay excess if:

You were not at fault

AND

You can identify the other driver

To prove this, you usually need:

• Their name

• Address

• Car registration

• Contact details

• Their insurance, if possible

If the other driver refuses to provide information, you may need to contact authorities.

How Excess Affects Your Premium

On almost every car insurance website, you’ll notice that adjusting your excess changes the price of your cover.

Higher excess → lower premium

Good for:

• Experienced drivers

• Those who rarely make claims

• People want cheaper annual premiums

Lower excess → higher premium

Good for:

• New drivers

• People who drive in busy areas

• Those who prefer a smaller upfront cost during a claim

Choosing the right excess helps balance long-term cost versus immediate affordability.

How to Choose the Right Excess for Your Needs

Selecting the right excess requires considering your budget, driving habits, and who uses your car.

1. Consider your ability to pay during a claim

Can you comfortably pay a higher excess if needed?

2. Think about how often your car is used

Daily drivers in areas with heavy traffic may prefer a lower excess.

3. Consider your claim history

If you rarely make claims, choosing a higher excess can save money on premiums.

4. Check who drives the vehicle

Add all regular drivers to the policy to avoid undeclared driver excesses.

5. Review your policy schedule and PDS

Each insurer has slightly different excess rules and definitions.

Excess and Common Real-World Scenarios

Below are examples of how excess might apply in everyday situations.

Scenario 1: You reverse into a pole

You pay your standard excess.

Scenario 2: Another driver rear-ends your car

If you can identify them: no excess. If they flee and can’t be identified: you pay excess

Scenario 3: A learner driver in your home uses your car

If they aren’t listed:

• Standard excess

• Age excess

• Undeclared driver excess

This can reach thousands of dollars.

Scenario 4: A storm damages your car

Most insurers require excess for weather damage, unless your policy has a specific feature stating otherwise.

Scenario 5: You hit an animal that is suddenly crossing the road

You typically pay the standard excess.

Windscreen and Glass Claims

Some insurers offer specialised cover for glass repairs.

Options may include:

• No excess for one windscreen claim per year

• Reduced excess for glass-only damage

• An optional add-on to lower wthe indscreen excess further

This can be useful if you drive on roads where debris damage is common.

Excess for Different Types of Car Insurance

Here’s how excess works across common car insurance types.

Comprehensive Cover

Excess applies to:

• Single-vehicle accidents

• Multi-vehicle accidents

• Weather damage

• Vandalism

• Fire and theft

• Animal collisions

• Property damage involvement

Unless the other driver is proven at fault, excess usually applies.

Third-Party Property Cover

Excess applies when:

• You damage someone else’s vehicle

• You cause property damage

• You hit a parked car and can’t find the owner

• The at-fault party cannot be identified

If another driver is at fault and identifiable, you generally don’t pay excess.

Third-Party Fire and Theft

Excess applies to:

• Theft

• Fire damage

• Damage you cause to other people’s vehicles

Many policies also include separate theft excess.

Excess for Rental Cars

Rental vehicles usually come with a high excess, often ranging from $3,000 to $6,000. You can reduce this amount by paying for a “damage liability reduction” or choosing travel insurance with excess reimbursement.

FAQ:

Here are the top questions most drivers ask about car insurance excess.

1: Do I always need to pay the excess?

Not always. If another driver is clearly responsible for the accident and their details can be provided, you usually won’t need to pay excess.

2: Can I choose my own excess amount?

Yes. Most insurers allow you to adjust your standard excess. Increasing it lowers your premium, while reducing it raises your premium.

3: Does excess apply to windscreen damage?

Some policies charge an excess for windscreen claims, while others offer:

• Reduced excess

• No-excess windscreen cover

• Optional windscreen add-ons

It depends on your policy inclusions.

Conclusion

Understanding excess is essential when choosing a policy and preparing for any future claims. Knowing when you’ll have to pay and how much can help you manage your budget, avoid surprises, and make smarter insurance decisions. The key is selecting an excess that fits your financial comfort level while ensuring your cover remains effective.