Pros and cons
Cuts the cost of claiming
Protects against hire car excess
Cheap if you shop around
Conditions and exclusions apply
You may not need cover
It can be expensive*
What does it cover?
It covers the cost of:
Insurance policy excesses, like your motor or home cover
High excesses charged by hire car companies
Excess insurance can cover compulsory and voluntary excesses on a range of insurance policies.
You will need to agree an excess limit before you take out cover; the higher your limit, the more you pay for cover.
No, you need to list the insurance you want to cover on your excess policy documents. You can give details to your excess insurer over the phone, or by completing a quote online. They may also ask for copies of your policy documents, as proof of your excess.
Is it worth the cost?
It depends on how high your excess is and the cost of an excess insurance policy. For example, some can cost as little as £2 a month, but others are more expensive.
Weigh up the price of an excess policy against the cost of paying your excess. If it is cheaper to pay your excess, don't pay out for cover.
Do you need it?
Hiring a car
If you hire a car, excess insurance could save you a lot of money.
Hire car companies can apply a £1,000 excess while you are renting a vehicle. This means you would have to pay for any damage up to the value of £1,000. But if you have excess insurance, it would cover this cost for you.
Shop around to find the cheapest deal and avoid buying insurance directly from your rental company.
However, make sure getting cover from a separate excess insurer does not break the terms of your hire agreement.
Yes, but they usually come with a high compulsory excess, e.g. £1,000. This means you have to pay for accidents or damage to the hire car, that is less than the excess.
Other types of insurance
Excess insurance could save you a lot of money if you have a high compulsory excess.
For example, you may have to pay a high theft excess on your motor insurance, or for subsidence claims on your home policy.
If you are a new or young driver, you may also face higher compulsory excesses because you are more likely to make a claim.
What type should you get?
The three types of excess insurance you can choose from are:
Car hire: This covers you for rental vehicles where high excesses apply. You can take out cover on a daily or annual basis, depending on how long you are hiring the car for.
Single policy: This covers the excess on one insurance policy, like your car or travel insurance. This is best if you have insurance with a high excess to save on your premium.
Lifestyle policy: This covers the excess on a range of insurance policies, like your car, home and travel insurance. This is usually the cheapest way to cover all your policies, but there will be a total cap on how much you can claim for.
How to find the right cover
Shop around by using our comparison to find the right cover at the cheapest price. You should check:
The claims limits, which should be enough to cover your excess
The price, which needs to be less than your excess to be cost effective
Whether the policy is annual, or runs daily (e.g. for hire car cover)
If worldwide cover applies, particularly for car or travel insurance
The exclusions, so you know what you can claim for