What is the difference between an excess and a voluntary excess?

Understanding the distinction between excess and voluntary excess is essential for navigating your home insurance policy:

Excess Defined

An excess is the amount you must contribute towards a claim before your insurer covers the remaining costs. It consists of both compulsory and voluntary components.

Compulsory Excess

This is the mandatory amount set by your insurer, automatically applied to every claim. It is non-negotiable and forms part of the total excess.

Voluntary Excess

Unlike compulsory excess, this is an optional amount you can choose to pay voluntarily in addition to the compulsory excess. Opting for a higher voluntary excess may lower your premium but increases your upfront contribution in a claim.

Combined Impact

In the event of a claim, both compulsory and voluntary excess amounts are combined. For example, if the compulsory excess is £200 and you choose a voluntary excess of £100, you would pay a total excess of £300.

Premium Considerations

Selecting a higher voluntary excess might lead to a reduced premium, but it’s crucial to weigh the potential savings against your ability to cover the higher excess during a claim.

Summary

Being knowledgable on the differences between excess and voluntary excess empowers you to make informed decisions when customising your home insurance policy. Consider your risk tolerance and financial capacity before choosing a voluntary excess amount.