What is voluntary excess?

Voluntary excess is the amount you choose to pay towards any claim on top of the compulsory excess set by your insurer. A higher voluntary excess reduces your premium, but means you pay more if you make a claim.

How does excess affect premiums?

Increasing your voluntary excess typically reduces your premium by 5-20%. Going from zero to £500 excess might save £50-£150 per year. However, the savings decrease at higher levels and the financial risk of a claim increases.

What is the optimal excess?

The optimal excess depends on your claim probability. If you rarely claim, a higher excess saves money overall. If you claim frequently, a lower excess may be cheaper despite the higher premium. This calculator finds the balance point.

Should I set excess higher than my car value?

Never set your voluntary excess higher than your car is worth. If your car is worth £2,000, setting a £1,000 voluntary excess on top of £250 compulsory excess means you would receive very little in a total loss claim.

Does excess apply to all claims?

Voluntary and compulsory excess apply to fault claims and claims where the at-fault party cannot be identified. If you are hit by an insured third party, their insurer should pay the claim and you would not need to pay excess.

CarCalcs

Insurance Excess Optimizer

Find the optimal voluntary excess level to minimise your expected annual insurance costs.

Current Annual Premium

Amount in pounds sterling

Claim Frequency

How often this occurs

Current Voluntary Excess

Vehicle Value

Amount in pounds sterling

How We Calculate This

This calculator finds the excess level that minimises your expected annual insurance cost.

The Formula

Expected annual cost = Premium + (Claim probability x Total excess)
Total excess = Compulsory excess (£250) + Voluntary excess
Higher excess lowers the premium but increases cost if you claim
The optimal level balances these two factors

Frequently Asked Questions

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Last updated: March 2026

All calculations are estimates. Actual figures may vary based on driving conditions, vehicle specifications, and other factors.