What is a car insurance excess and how much is it?

What are the different types of car insurance excess?

Different types of car insurance policies include different types of excesses. Policyholders may be required to pay more than one excess, depending on the circumstances of the claim. The most common varieties of car insurance excess are:

• standard driver excess
• age excess
• unlisted driver excess (an excess payable if the driver involved in a crash was not nominated in your policy)
• glass/windscreen excess

What is standard driver excess or basic excess?

Typically, this is the type of excess that you pay no matter what the claim is or the circumstances of the claim. For example, if you have a policy with a ‘standard’ or ‘basic’ $500 excess on all claims, you would need to pay $500 towards your insurance claim before the insurer would start to contribute towards the cost of a claim. This type of excess is the compulsory kind, and it cannot typically be negotiated. It can differ between policyholders because it may be altered by factors such as where you park your car, what state you are in and the age of your car. Other types of excess would be in addition to any standard excess in a policy.

Standard driver excess is also often called a ‘basic excess’ by insurers. Separately, a voluntary excess can apply that you might choose to further reduce the amount of your car insurance premium.

What is age excess?

An age excess applies when a policy requires a policyholder to pay a certain amount towards the cost of a claim if the driver of the vehicle is below a certain age (typically 21 or 25, but this could differ between insurers). For some insurers, the amount of the excess depends on whether or not the driver was listed on the policy.

Tip: It’s a good idea to call your insurer if you plan to have a younger person drive your vehicle. This includes a learner driver (and when they move on to being a P-plater). Some policies may require a learner or P-plater to be listed, while others do not.

What is unlisted driver excess?

Some insurers require that anyone driving an insured car is listed on the policy, and will otherwise impose an additional excess if the unlisted driver is involved in a crash that requires a claim to be made. This might be referred to in a car insurance policy as an undisclosed driver excess, unnamed driver excess, unlisted driver excess or non-nominated driver excess, with the requirement varying from insurer to insurer. It is a good idea to check with your insurer before signing up to see if this excess may apply.

What is licence excess or inexperienced driver excess?

Some insurers also require policyholders to pay an excess depending on how long the at-fault driver of the insured vehicle has held their licence. For example, this could include an older driver who has only recently qualified to hold a licence. In this instance, the age excess might not apply but because the driver has only had their licence a short time, the policyholder could be required to pay an excess.

What is driver history excess?

Similar to the inexperienced driver excess, some insurers will also charge a driver history excess if the at-fault driver for the claim had their licence cancelled, suspended, disqualified or restricted in the last three years prior to the start of the policy. This excess is usually in addition to any other excess, such as an unlisted driver excess.

What is special excess?

Special excess is a term some insurers use to describe an excess outside the normal limits of other excesses. For example, Toyota Insurance’s Comprehensive Motor Vehicle Insurance guide lists special excess as applying “where you have modified your vehicle or added nonstandard accessories to your vehicle which may increase the cost of repairs following a claim; or because of the driving, criminal or insurance history of you or any regular driver listed on your policy schedule.” This could be added to the cost of any other excesses you may have to pay.

What is glass and windscreen excess?

Some policies may allow you to pre-emptively reduce or even waive the excess on a claim related to your windscreen or windows. However, choosing this option could increase your premiums.

Is it better to have a high or a low car insurance excess?

Whether or not it is better to have a high or low insurance excess depends on your personal circumstances. Typically, insurers will offer a lower upfront premium if you are prepared to pay a higher excess when it comes time to claim. However, if you had to make a claim, you would be required to pay the excess, typically in full,  in order to have the claim paid out by the insurer.

Compare Car Insurance

Can I avoid paying car insurance excess?

If you are in an accident and are not at fault (either wholly or partially), and can provide details for the other driver and vehicle(s), you may not have to pay the excess that applies on your car insurance policy. Your insurer may consider this to be a ‘no fault accident’, and instead pursue the at-fault driver’s insurance company for the cost of the claim to fix your car.

Keep in mind that if the other party is not insured, can’t be found or simply refuses to pay, you may find yourself in a difficult situation financially, with this condition not being met. This might lead to a dispute resolution process and potential legal action.

Car insurance terms and conditions can vary, and it is recommended to read the PDS first if you are considering purchasing a policy from a provider. You can compare car insurance with Canstar. In addition, our Car Insurance Star Ratings and Awards include an Outstanding Claims Service Award that recognises providers delivering customer satisfaction for the car insurance claims process.

See Car Insurance Award Winners

May I be asked to pay more than one car insurance excess?

If you are at fault in an accident, you will typically be required to pay an excess (or several excesses) based on your car insurance policy. For example, you might be asked to pay a basic excess and a voluntary excess (if you have chosen this as part of your policy). The Financial Rights Legal Centre in NSW also explains that, depending on the situation, an insurer might consider you are claiming for two incidents, or even under two different policies (for example, if you hit the accelerator of your car instead of the brake and accidentally drive it into your family home, your car insurance covers for the damages to your car, and your home insurance covers the damages to your home).

What happens if I cannot afford to pay car insurance excess?

The National Debt Helpline says that if a policyholder is in financial hardship and is unable to pay a car insurance excess, they should talk to their insurer. The helpline states that an insurer “cannot refuse to process your claim because you failed to pay the excess”, and adding this advice: “If you can claim but cannot afford to pay the excess upfront because you are in financial hardship, then you can ask your insurer for an arrangement to repay your excess by instalments. You can also ask the insurer to deduct the excess from any payout you receive.”

The helpline gives a list of recommended actions someone in financial hardship could take if faced by a car accident debt, which includes: seeking legal advice as a good idea “if you’re not sure whether you’re responsible for the damage”; making sure the amount being claimed is a “reasonable” on any insurance policies you may have; liaising with the insurance company or debt collector if you can’t pay; and seeking financial counselling from the helpline if you need to (phone 1800 007 007).

Learn more: Financial hardship: what is it and how can you regain financial control?

How financial counsellors can help Australians in difficult

The helpline states that if you can’t come to an arrangement with your insurer, you can make a complaint to the Australian Financial Complaints Authority (AFCA) online or by phoning 1800 931 678.

Thanks for visiting Canstar, Australia’s biggest financial comparison site*