Home insurance excess explained

What is a home insurance excess?

Home insurance excess is the amount you must contribute towards a home insurance claim before your insurer pays the remaining cost. It applies each time you make a valid claim under your policy.

The excess is usually deducted from the final payout rather than being paid separately. For example, if your claim is £5,000 and your total excess is £500, the insurer would pay £4,500.

What is the difference between voluntary and compulsory excess on home insurance?

There are two types of excess on a home insurance policy:

1. Compulsory excess is the amount set by the insurer. It cannot be changed and may vary depending on the type of claim. For example, flood insurance or subsidence insurance claims often have a higher compulsory excess.
2. Voluntary excess is an additional amount you choose when taking out your policy. Selecting a higher voluntary excess can help reduce the cost of your premium.

Your total excess is the combined amount of both the compulsory and voluntary excesses.

How does voluntary excess affect my home insurance premium?

Choosing a higher voluntary excess can lower your home insurance premium. This is because you agree to pay more towards any future claim, which reduces the insurer's potential costs.

Home insurance providers may view policyholders who choose a higher excess as less likely to make smaller claims. As a result, they may offer a lower annual premium.

However, it is important to choose an excess amount you could comfortably afford to pay if you ever need to claim.

How does voluntary excess work when I make a claim?

When you make a home insurance claim, both the compulsory excess and any voluntary excess are added together to form your total excess.

For example, if your compulsory excess is £150 and your voluntary excess is £300, your total excess would be £450. If an approved claim is worth £3,000, the insurer would deduct £450 and pay £2,550.

Before choosing a voluntary excess, consider whether you would be able to cover the amount if you need to make a claim in the future.

What happens if I choose an excess I can't afford?

If your total excess is more than you can comfortably afford, you could face financial pressure when the claim is approved. The insurer will still deduct the full excess from the settlement amount.

Some insurers may offer support if you are struggling to pay your excess, such as a payment plan. However, the options available can vary between providers.

If you are concerned about paying your excess, contact your insurer as soon as possible to discuss your circumstances and find out what help may be available.

Another option worth knowing about is excess insurance, which we cover in the next section.

Should I buy excess insurance?

Excess insurance is a separate policy that reimburses the excess you pay when making a successful claim on your home insurance.

It is most commonly considered by homeowners who have a high compulsory or voluntary excess and want extra protection against unexpected costs.

The main benefit is that it can reduce the financial impact of making a claim. For example, if your home insurer deducts a £500 excess from a claim settlement, an excess insurance policy may reimburse some or all of that amount, depending on the terms of the cover.

However, excess insurance comes with its own cost. Before buying a policy, compare the premium against the amount of excess you could potentially recover over the policy term. It is also important to check any exclusions, claim limits and waiting periods that may apply.

For some homeowners, excess insurance can provide valuable peace of mind. For others, it may be more cost-effective to set aside savings to cover the excess if they ever need to make a claim.

When deciding whether excess insurance is worthwhile, consider your excess amount and whether you could comfortably cover that cost yourself if you needed to claim.

How to decide the right voluntary excess amount for your home

There's no one-size-fits-all answer - it all comes down to your budget and how much risk you're comfortable with.

A higher voluntary excess usually means a lower premium, but make sure it's an amount you can comfortably afford to pay if you need to claim.

A few things to consider:

• How much you could realistically afford at short notice
• The premium difference between excess levels
• Whether your policy already has a compulsory excess on top

According to Uswitch data, the most common excess for buildings and contents insurance is £250*. That's a useful benchmark, but the right amount is simply whatever you could cover without financial difficulty.

Before deciding, compare a few excess levels to see whether the premium savings are actually worth it.

^{*Based on average excess across buildings and contents insurance policies (Uswitch data, Q4 2025).}