Car Insurance Excess: What Will It Cost You?

  • There can be a 30-40% cost difference in monthly premiums between the lowest and highest car insurance excess selected on a policy, based on analysis by Money.com.au.
Car insurance excess
Car insurance excess

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What is the excess in car insurance?

An excess is the out-of-pocket amount you must contribute when you make a claim on your car insurance. For example, if your standard excess is $800 and you make a repair claim for $5,000 your insurance provider would cover the remaining $4,200.

A standard excess under a car insurance policy will generally apply to the following insured events:

  • Accidents where the insured driver was shown to be at fault
  • Accidents where someone else covered by your policy was at fault
  • Accidents where no one was at fault (e.g. if traffic lights are out of action)
  • Accidents where the responsible party could not be identified
  • Accidents involving your vehicle and an uninsured motorist was at fault
  • If your car is damaged by fire or a weather-related event like floods
  • If your vehicle is stolen or damaged in an attempted theft incident

You may have to pay additional excesses, depending on who was driving your vehicle. For example, if a young driver under 25 causes an accident while driving your car, you’d have to pay your standard excess, plus an additional young driver excess.

Your excess payable per claim or incident will be outlined in your Product Disclosure Statement (PDS), generally under the ‘Excess On Claims’ section. It will also be on your Certificate of Insurance.

When you don’t have to pay an excess

You don’t have to pay an excess if you’re in a crash where another driver was shown to be responsible. You’ll need to provide your insurer with the name and address of the person at fault, with their vehicle's registration number. In this case, their insurance (if they’re insured) should cover the damages to your car under their third party property damage clause.

Types of excess for car insurance

Here are the different excess types you may encounter when making a claim:

  • Standard excess: Also known as basic or default excess, this is the excess that applies to all claims. Most insurers allow you to adjust this excess up or down to suit your circumstances.

  • Voluntary excess: This is when you choose to pay a higher excess to help reduce your car insurance premium. For example, if your standard excess is $700, you could adjust it to $900, although this means you’ll pay more at claim time.

  • Unlisted drivers excess: This is payable if an unlisted driver using your car is involved in an incident. For example, if your spouse or someone from your household was behind the wheel, but not listed on your policy. You can avoid this additional excess by listing all drivers who may drive your car on your policy.

  • Learner driver excess: Some insurers may apply an additional learner driver excess for claims involving a learner driver.

  • Inexperienced driver excess: Some insurance policies may apply this excess in the event of an at-fault incident involving a driver who has not held a full Australian or open licence for two or more years.

  • Young driver excess: Also known as an ‘age excess’, this applies to claims involving drivers under 25 years old. Some policies have different excess tiers for young drivers under 21 and up to 25.

  • Windscreen excess: A different excess might apply to claims for windscreen or window glass repairs shown on your policy schedule. You can generally pay an extra premium to reduce your windscreen and window glass damage if it’s the only damage to your car following an incident.

How much will my excess be?

The standard excess on a car insurance policy can vary between $800-$1,000 depending on the insurer, based on analysis by Money.com.au. However, you can opt to reduce or increase it to suit your budget. You can always compare insurance policies from different providers to see which have the lowest default excess.

Example excess amount from popular insurance providers

This table shows different standard and additional excess amounts from selected insurers. Be sure to read your insurer’s Product Disclosure Statement (PDS) for the excess that applies to your individual policy.

Standard excess

Budget Direct

$800

ING

$800

Suncorp

$900

Youi

$1,000

Unlisted driver excess

Budget Direct

$600

ING

$2,000

Suncorp

$1,400

Youi

$2,000

Young driver excess (under 21)

Budget Direct

$600

ING

$600

Suncorp

N/A

Youi

N/A

Young driver excess (under 25)

Budget Direct

$500

ING

$500

Suncorp

$400

Youi

$600

Budget DirectINGSuncorpYoui

Standard excess

$800

$800

$900

$1,000

Unlisted driver excess

$600

$2,000

$1,400

$2,000

Young driver excess (under 21)

$600

$600

N/A

N/A

Young driver excess (under 25)

$500

$500

$400

$600

Information correct as at 17 January 2024.

Can you adjust your car insurance excess?

Yes, most insurers will give you the option to adjust your standard excess. You can do this by changing your policy details online or by calling your insurer directly. Keep in mind that reducing your excess will increase your car insurance premiums and vice versa. See this example from ING, where the standard excess is $800, but you can reduce it to $600 or increase it to $1,800. You generally cannot reduce any additional excesses.

ING car insurance excess options
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In some cases, the default excess included in car insurance policies is the minimum payable, so you may not be able to reduce your excess.

How could your excess amount impact your car insurance premium?

Here’s an example of the cost difference in car insurance premiums when reducing or increasing your excess. Quotes are based on a 30-year old female main policyholder in QLD driving a 2019 Mitsubishi ASX (private use), with no previous claims and no driver under 25 listed on the policy. Prices shown are for this scenario only and are not necessarily indicative of what you may pay.

Budget Direct

Monthly premium with highest excess

$76.45 ($1,800 excess)

Monthly premium with default excess

$102.44 ($800 excess)

Monthly premium with lowest excess

$111.18 ($600 excess)

ING

Monthly premium with highest excess

$82.41 ($1,800 excess)

Monthly premium with default excess

$110.20 ($800 excess)

Monthly premium with lowest excess

$119.53 ($600 excess)

Suncorp

Monthly premium with highest excess

$82.17 ($1,600 excess)

Monthly premium with default excess

$104.15 ($900 excess)

Monthly premium with lowest excess

$117.68 ($700 excess)

Youi

Monthly premium with highest excess

$100.87 ($2,500 excess)

Monthly premium with default excess

$112.17 ($1,000 excess)

Monthly premium with lowest excess

$147.20 ($600 excess)

Monthly premium with highest excessMonthly premium with default excessMonthly premium with lowest excess

Budget Direct

$76.45 ($1,800 excess)

$102.44 ($800 excess)

$111.18 ($600 excess)

ING

$82.41 ($1,800 excess)

$110.20 ($800 excess)

$119.53 ($600 excess)

Suncorp

$82.17 ($1,600 excess)

$104.15 ($900 excess)

$117.68 ($700 excess)

Youi

$100.87 ($2,500 excess)

$112.17 ($1,000 excess)

$147.20 ($600 excess)

Quotes obtained on 17 January 2024.

How do you pay your car insurance excess?

Depending on your insurer and the circumstances of your claim, you may have to pay the excess directly to your insurer when you make a claim, or it may be deducted from your claim payout.

Here’s how most insurers ask you to pay your excess in the following scenarios:

  • If your car is damaged, your excess may be deducted from your claim payout before the repairs begin.
  • If your car is written off, most insurers will deduct your excess from the final settlement amount they pay you.
  • If you make a claim under a new for old replacement benefit, your insurance may ask you to pay your excess before they replace your car.

When you make a claim, your insurance will generally tell you:

  • Whether an excess is applicable
  • The total excess amount, including any additional excess
  • When and how you need to pay the excess.

Deciding whether a claim is worth paying the excess

Sean Callery

“A couple of years ago I had a minor at-fault accident but ultimately decided not to make a claim on my car insurance. The excess amount plus the potential impact on the no-claims discount meant it wasn’t really worth my while. The financial difference wasn’t significant either way, but it was also more straightforward to just pay to get the damage repaired myself.”

Sean Callery, Editor of Money.com.au

Car insurance excess FAQs

Charging an excess helps car insurance providers make their premiums more affordable as it contributes to the costs of repairing or replacing your or another driver’s vehicle. Excesses are also designed to prevent drivers from making low-value claims – for minor scratches and dents on a car, for example. Policyholders contribute an excess to each claimable event, ensuring they only make claims that cost more than their excess amount.

Yes, an excess generally applies to every at-fault claim (even if it's a write-off) or in the event your car is stolen or damaged by fire or severe weather. You generally don’t have to pay an excess for no-fault accidents if you can provide your insurer with the full name and vehicle registration number of the person who was at fault.

Yes, you may have to pay for a windscreen or window glass excess. This is unless you have opted for an optional window protection add-on that reduces or waives your excess for windscreen or window glass repairs if it’s the only damage to your vehicle in an accident.

Yes, you can generally adjust your car insurance excess on comprehensive car insurance policies only. You can reduce your basic excess, but it will increase your car insurance premium. On the other hand, increasing your excess generally reduces your premium.

No, your car insurance excess is usually paid as a fixed lump sum and taken out of your claim payout in most cases. If you’re struggling to pay your excess due to financial hardship, you can discuss with your insurer to explore the options available under their financial hardship policy.

For example, Youi’s Financial Hardship Policy states that Youi will provide financial hardship assistance to an individual insured under their policy in the event of outstanding amounts, which may include an excess.

Written by

Megan Birot Money.com.au writer

Senior Finance Writer

Megan Birot

Reviewed by

Sean Callery Editor Money.com.au

Editor

Sean Callery

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