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Home insurance excess: Compulsory vs voluntary explained

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Your home insurance excess is the initial amount that you're willing to pay towards a home insurance claim. The amount you choose impacts your home insurance price.

It works in the same way as car insurance excess.

Let's take a closer look at how excess on home insurance works, and the differences between voluntary and compulsory excess.

Toy houses sit on piles of money representing home excess

Your home insurance excess is a fixed amount that you have to pay out if you make a claim on your home insurance policy.

There are 2 types of excess:

When paying this excess, you don't give cash to your insurance company. Instead, your insurer deducts this amount from your total payout, and sends you the rest.

For example, let's say you have an excess of £250 and you make a claim for accidental damage that's worth £1000. Your insurer keeps the first £250 and gives you £750.

Unlike car insurance excesses, you have separate excess for your buildings and contents insurance. Even if you have a combined home insurance policy, you still have 2 separate sets of excess.

Your voluntary and compulsory excesses are added together to get your total excess. This is the total amount that gets deducted from your claim payout.

Voluntary excess

Voluntary excess is optional - you can choose to pay between £0 and £400.

Choosing to pay a higher voluntary excess could mean your home insurance costs are lower. This is because insurers don’t have to pay as much in the event of a claim.

Compulsory excess

Insurers apply compulsory excess to every home insurance policy. The amount varies, but it can be as low as £50.

Example

Your home insurance policy has a compulsory excess of £150, and you set your voluntary excess to £250. Your total excess on the policy is £400.

If you make a home insurance claim for £1,000, your insurer deducts this £400 from your settlement. They then give you the remaining £600.

You pay home insurance excess whenever you make a claim on your policy, no matter how small the claim is.

On certain types of claims, different excesses may apply. Your excess also depends on the type of home insurance you buy.

For example, if you have accidental damage cover as part of your contents insurance policy, your compulsory excess might be higher.

On buildings insurance cover, the excess for subsidence claims is likely to be a lot higher – around £1,000. That’s because these kinds of claims are normally much more expensive.

If you’re thinking about claiming on your home insurance, work out if it's worth it.

A low-value claim means you don't get a lot from your insurer once they deduct your excess. And your no-claims discount is also impacted when you make a claim.

How much you pay is up to you, but you should always make sure you're able to afford both the compulsory and voluntary excess in the event of a claim.

According to our data, the most common amount of excess is £250*:

  • 54% of policies have £250 set for buildings excess
  • 49% of policies have £250 set for contents excess

Setting a higher voluntary excess might only save you money if you don’t end up making a claim.

Also, you want to make sure your voluntary excess is lower than how much you'd expect to claim for. This makes sure that you’re not paying for the whole claim yourself.

For example, let's say you think you’d claim for a stolen laptop that costs £500 and your compulsory excess is £100. You'd then want your voluntary excess to be lower than £400 to make claiming worth your while.

This depends on the specific insurer. Many home insurance companies let you put in a voluntary excess of £0.

When you compare home insurance quotes with us, we'll give you the option of selecting different voluntary excesses including:

  • £0
  • £150
  • £250
  • £400

Since your compulsory excess is set by the insurer, you don't have the option to change this. You can see a breakdown of your excess on a particular policy just beneath the price of each quote.

In general, yes. According to our data, the average cost of home insurance where buildings excess is set to £250 is £157*. For policies with £0 buildings excess, it's £176.

And policies with a contents excess of £250 cost £153, on average. But policies with £0 contents excess cost £163.

When you compare quotes with us, you can change the level of your voluntary excess and we'll update the prices we show you. Doing this helps you get a feel for how much home insurance excess you're comfortable putting in.

What our home insurance expert says

“A higher voluntary home insurance excess indicates to your insurer that you're less likely to make a home insurance claim for something small. And even if you do make a claim, your insurer has to pay out less. This reduces your risk of making a claim at all, often giving you lower home insurance costs.”

If you're looking to get cheaper home insurance and you don’t want to increase your excess, here are some other tips:

*Confused.com data. November 2022 - October 2023.

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