Home Insurance Excess Explained

1st December 2018by Chloe Dickenson

When it comes to home insurance excess, there’s no certain set amount that you’ll have to pay. It differs with each and every home insurance provider.

While there may not be a set amount, there is a general rule of thumb when it comes to home insurance excess. It is the amount that you pay towards a claim before your insurance provider contributes; the amount that you pay depends on the amount you set when you first took your policy out.

Home insurance excess can be a little tricky to get your head around, so we’ve put together a guide on everything you need to know about it.

How it works

The way that home insurance excess works is that when you make a claim, your insurance provider will always take a small (set) amount from you before they pay out for your claim.

Most insurers will have a set minimum that the excess must be, it can often be as little as £50 but will likely differ with each and every insurance provider.

As a general rule, most insurance providers will offer you a lower premium if you choose a higher level of voluntary excess. It’s usually entirely your decision, but it’s important to think carefully about whether you’ll actually be able to afford the excess part of your claim.

There are two types of home insurance excess that insurers adhere to; compulsory excess and voluntary excess.

Compulsory excess

This is the type of home insurance excess that is set by your insurance provider. Not every insurer will offer compulsory excess, but it’s usually quite common with most home insurance providers.

Depending on whether your insurer expects you to pay compulsory excess, it will also be a set fee and is non-negotiable; you have no choice but to pay it.

Aviva

Voluntary excess on the other hand, is an amount that’s agreed between you and your insurance provider.

Whenever you buy your home insurance policy, you’ll usually have the option to pay a higher excess if you made a claim.

You may wonder why you’d want to pay a higher amount of voluntary excess, but it means that you’re likely to pay a lower premium amount, either each month or each year.

This means, if you never make a claim, then you will continue to pay low premiums without ever having to pay towards your excess.

It can be risky however, as if you do need to make a claim, then you must ensure that you’re able to pay the excess agreed by you and your provider.

Other types of home insurance excess

There are also numerous other types of home insurance excess you should be aware of. While these aren’t always a given, they are something to bear in mind when you’re looking for the best home insurance policy with the most suitable excess for you.

Accidental damage excess

Accidental damage excess is usually higher than any other type of home insurance excess.

An example of accidental damage could be water leakage within your home, and as insurers consider this issue to be fairly common, the excess is usually higher than that of a standard claim.

Subsidence excess

This type of excess is required when you’re making a claim for subsidence. Subsidence is something that’s caused by the downward movement of the ground beneath your house.

This is not considered to be very common, but if it does occur then you will be expected to pay the excess when you make a claim for subsidence.

Flood excess

Flooding is also thought to be becoming more and more common, which may be considered to be a good thing for insurers, but not for homeowners.

If you live in a flood-prone area, then you can expect your flood excess to be quite significant; oftentimes it can creep up into the thousands if you’re needing to claim a lot due to flooding in your home!

However, if you don’t live somewhere that experiences lots of floods, then you may find that this type of home insurance excess isn’t actually too different from your standard excess, so you won’t need to worry about it too much.

Home insurance excess explained

As previously mentioned, home insurance excess differs between every policy provider and is calculated based upon many different factors.

There are also numerous types of home insurance excess so it’s important to do your research so that you get the right policy and excess for you. Both Admiral Home Insurance and M&S Home Insurance offers a reasonably low excess on their home insurance policies policies.