The excess if the amount you have to pay yourself before your insurer will pay a penny. And if money is tight, you may even have opted to increase the excess in order to reduce your premiums, hoping that you will never have to claim. Ouch.

The good news is there is a way to protect against the pain of having to pay your share of any claim: excess protection insurance. We take a look at how to insure against excess payments and the fundamental facts you should know.

The basics

When you take out insurance, the company will stipulate a minimum sum that you must pay in the event of any claim. This is known as the compulsory excess. You can opt to increase this amount in order to reduce the premium. The amount you raise it by is known as your voluntary excess. The two amounts combine in order to create your total excess figure and it is this which you must pay if you make a claim. The same principle applies for all types of insurance: pet, household, travel and motor cover all work in an identical way.

If you take out excess insurance, in the event of a claim, although you will have to initially pay the excess, it will be reimbursed. The really good news is that you can get voluntary excess insurance cover as well as compulsory excess insurance, so you won't have to pay a penny!

Is it worth it?

You will need to compare excess insurance quotes against the amount of money you could save by increasing your voluntary excess to work out the cheapest way to be covered for every penny. You might find that the money you save on your insurance by increasing your excess more than pays for the excess refund insurance!

However, there will be a cap on your cover insurance claims so you will need to make sure your excess doesn't exceed this amount.

As you will need to pay the excess yourself first, it's also worth checking how to claim back insurance excess before you take out a policy. The best excess insurance company will ensure the process is simple and speedy so you're not out of pocket for long.

What can be covered?

Excess insurance - which is also sometimes known as excess refund cover or motor excess waiver insurance - can apply to more or less every type of insurance.

It's particularly associated with car insurance, possibly because this is one of the most common types of cover which would have a large excess.

There are primarily two different types of cover you can take out: single policy protection or excess insurance annual cover. With the former, just one specific excess is covered. You can therefore take out one of these policies to cover each of the insurances you may hold. This could work out to be quite an expensive option and unless you are unfortunate enough to make multiple claims, you are likely to be paying out for lots of cover you don't end up needing. The second option can work out more cost-effective as it insures multiple excesses under just the one policy. This could include all types of insurance - motor, travel, pet, household and health - one one policy.

To get the most from your protection, you should compare excess insurance companies to find the best deal. An excess cover insurance comparison will identify the most comprehensive policies with the cheapest premiums. As mentioned earlier, it's important to compare this cost against the savings you could make on your individual policies by increasing the excess.