What is excess insurance?
Excess insurance is more common for hire cars than privately owned cars, but it is available to buy. Alternatively, some price comparison websites run promotions where they give you free excess cover if you buy a policy through them.
Excess insurance is usually a separate policy from your car insurance and will cover the cost of your excess if you need to pay it in the event of a claim. You normally pay the excess and then claim the amount back from your excess insurance policy provider.
You’d need to do the sums to work out if excess insurance is worth buying. To do this, look at how much you could save on your premium by increasing your voluntary excess. Then compare this cost saving to the cost of excess insurance.
For example, if increasing your excess from £500 to £700 would save you £100 on your insurance, it would only be worth buying excess cover if it cost less than £100.
Bear in mind that excess insurance only pays out if the claim is worth more than the excess. For example, if you had an excess of £500 but the claim was only £200, neither your car insurance policy nor your excess cover would pay out.