Everything you need to know about car insurance excess

Published September 2024 | 4 min read
Words by Donnay Torr

Accidents can put a dent in your finances, as well as your car. But with the right insurer on your side and a little know-how, you can better manage your car insurance premiums and excess in one go.

Life is full of unexpected bumps in the road – quite literally, if you happen to own a car. That’s why we purchase car insurance, to help cover some of the dents, dings and related headaches, as well as unfortunate accidents that may occur.

What is a car insurance excess?

A car insurance excess is how much you’ll pay in order to make a claim on your insurance policy – and it may come as an unpleasant surprise if you’re unprepared to chip in when something goes wrong.

Paying an excess does have a purpose. It helps to keep your insurance premium payments more affordable – and may make you think twice before making unnecessary low-value claims. It’s also a good incentive for drivers to be more responsible on the road.

You can choose to increase your basic excess. This can lower your premium, but you’ll need to pay that higher excess in the event of an insured accident.

How much does a car insurance excess cost?

Your basic excess is the standard amount your insurer requires you to contribute to each claim and is set when you take out a new policy or renew an existing policy. The cost can vary, depending on the factors below:

• Types of car insurance – excess amounts for comprehensive car insurance (the higher level of cover) may differ from those of third-party insurance (only covers damage to a third party’s vehicle).
• Driver age – younger and inexperienced drivers may face higher excess payments, often referred to as ‘age excess’.
• Car value – you may face a higher excess if you have a more expensive vehicle.
  

You’ll usually pay any excess due when you make a claim. For example, if your repair bill is $10,000 and your excess is $700, you pay $700 and your insurer pays $9,300. Depending on your insurer, you may be asked to pay the excess directly to the repairer or supplier helping with your claim, or the cost of the excess may be deducted from the amount your insurer pays to you. You may also be required to pay the excess in full before you receive your policy payout or benefits.

What are the different types of car insurance excesses?

Once your basic car insurance excess is determined, you could also be looking at:

• Age excess – if you’re under the age of 25 and the at-fault driver at the time of the incident, some insurers will expect you to pay an added ‘age excess’ on top of your basic excess.
• Windscreen excess – different insurers have different options, and windscreen excess may be separated from your basic excess. Ensure you find the option that works best for you.

Do I have to pay insurance excess if it wasn’t my fault?

If the accident wasn’t your fault and you have the evidence that your insurer needs – and the at-fault driver’s contact details – to prove it, you may not have to pay an excess. That’s why it’s so important to be prepared before making your claim.

If you have an accident, remember to:

• get the correct contact details of any third parties and witnesses involved in the incident, including their insurer’s details, if possible
• take clear photos and/or video footage of the damage and accident site
• write a detailed statement of what happened (this could also be a statement given to police) and try to write this as soon as possible after the incident, when the details are fresh in your mind
• check the fine print of your insurance policy and make sure you understand what you’re covered for – and any exclusions.

If you were the driver at fault, or your car was damaged by an event like a hailstorm, you may have to pay an excess.

How can I reduce my car insurance excess?

The cost of your insurance premium vs excess is a trade-off: more excess usually means a lower premium and vice versa.

Whatever excess applies to you, there are ways to reduce your premium. One is to claim less. When you make a claim that your insurer has to pay out, you may find that your premium goes up when it’s time to renew your policy – even if you claim for damages that are out of your control, such as hail damage or a collision with animals.

There's also the option to choose public transport. No car? No insurance needed. Or simply use public transport more often to lower your risk of car accidents. If this is a practical option for you, try it – it’s better for the environment, too.

We understand the importance of safeguarding your assets against the unexpected. Which is why we’re now offering HCF Car Insurance for your car, ute or SUV. Get a quote today^*.