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When Do You Pay Your Car Insurance Excess?

Learn about car insurance excess payments and when you might need to pay with Savvy’s useful guide.

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, updated on February 16th, 2024       

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Car Insurance Banner - Young woman paying her car insurance excess on her tablet

An excess is a standard practice is car insurance, referring to the amount you have to pay towards a claim before your insurance coverage comes into effect.

Understanding car insurance excess is crucial when making a claim, as it determines the amount you must pay before your insurance coverage kicks in. In this guide, we explore the ins and outs of car insurance excess, providing a clear understanding of when you may need to pay.

What types of excess are there?

Most car insurance policies have a number of excesses that may be applicable depending on the nature of your claim. These include:

  • Standard/basic excess: the fixed amount you must pay towards a claim, set by your insurance policy.
  • Voluntary excess: an additional amount you choose to pay on top of the standard excess, which can lower your premium.
  • Age/inexperienced driver excess: an extra charge applied if the driver is under 25 or inexperienced.
  • Unlisted driver excess: if an unlisted driver is operating the vehicle at the time of an incident, this excess may apply.
  • Driver history excess: a surcharge based on the driving history of the person behind the wheel, for example if the driver is classed as high risk.

In what situations do I need to pay my car insurance excess?

When you may need to pay your car insurance excess can vary depending on your policy and the type of claim. Here are some common situations:

  • At-fault accidents
  • Theft or vandalism claims
  • Uninsured or unidentified drivers
  • Storm, fire, flood and hail damage
  • Animal collisions

Are there cases when I don’t need to pay my excess?

Depending on your car insurance policy there may be situations where you may not have to pay an excess, for example:

  • Not-at-fault accidents: when the other party is fully responsible, your insurer may waive the excess, and the responsible party’s insurance covers the costs.
  • No-excess policies: some insurers offer no-excess or additional coverage for specific claims.

You might also be able to reduce – though not remove – your excess on some policies by increasing your premium.

At what point do I pay my car insurance excess?

You pay your car insurance excess when you make a claim on your car insurance policy, on a per-incident basis. This means you need to lodge a claim and pay an excess for each separate incident. In most cases, for example if repairs need to be made to your vehicle, you will need to pay the excess before work can begin. The insurance company will then cover the rest of the eligible costs. In cases where you are receiving a settlement, such as if your car has been written off, your insurer may deduct the excess from the final sum.

Generally the excess is paid as a lump sum, although paying in instalments may be an option if your insurance provider agrees, for example if you are in financial hardship.   

If you are unsure about what you are responsible for paying or when and how to do it, you should check your car insurance policy documents or contact your insurance provider.

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Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.

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