When you buy car insurance in the UK, you’ll almost always see an excess listed on your quote. It can feel like a small detail compared with the headline price, but it’s one of the things that makes the biggest difference if you ever need to make a claim.

Most UK policies split excess into two types: compulsory excess and voluntary excess.

They work together, but they’re not the same thing. Not knowing the difference between voluntary and compulsory excess is one of the most common reasons people feel surprised or frustrated during a claim.

Let’s break down their key differences.

What is compulsory excess?

Compulsory excess is the amount set by the insurer. You can’t remove it, and you typically can’t reduce it when you buy the policy. It’s built into the quote based on how the insurer views the overall risk of insuring you and your car.

That risk can include things like:

• Your age
• Driving experience
• Type of vehicle you’re insuring
• Previous claims history

For instance, insurers often set a higher compulsory excess for newer drivers because they have a higher likelihood of making a claim. Similarly, some vehicles cost more to repair, which can influence what insurers set as the compulsory excess.

The key thing to remember is that compulsory excess is not optional. If you buy the policy, you’re accepting that you’ll pay at least that amount if you claim.

Read our car insurance excess guide for more information.

What is voluntary excess?

Voluntary excess is the extra amount you choose to add on top of the compulsory excess. This is the part you control when you’re getting a quote.

The reason voluntary excess exists is simple: if you agree to pay more towards a claim, the insurer may charge you less for the policy because they’re taking on less of the risk.

That can make voluntary excess feel like an easy way to bring the price down — but it only works if you choose a number you could realistically afford if something happens.

A higher voluntary excess might reduce the premium, but it also increases what you’d need to pay out in a claim.

If your excess is set too high, it can make having insurance less useful. Small or even mid-sized claims will fall within the excess amount, which means you’ll have to pay for them yourself.

If you can’t afford them, this can delay you getting back on the road after an accident.

How they work together: your total excess

If you make a claim, you normally pay the total excess, which is: Compulsory excess + Voluntary excess = Total excess

If an insurer sets a compulsory excess of £350 and you choose a voluntary excess of £250, your total excess is £600.

That doesn’t mean you pay £600 on top of the claim amount. It means your claim payout is reduced by £600, or you pay that amount to the repairer, depending on how the claim is managed.

How to choose a sensible voluntary excess

A simple rule of thumb is to set a voluntary excess you could pay tomorrow without it causing a problem.

If increasing your voluntary excess saves you a small amount on the policy, but increases your potential out-of-pocket cost by hundreds of pounds, that trade-off may not be worth it.

People sometimes chase the cheapest premium and forget they’re effectively agreeing to self-fund more of any future claim.

For many drivers, a moderate voluntary excess can be a good middle ground: it reduces the premium a little, without pushing the total excess into territory that would be difficult to cover.

Summary: compulsory vs voluntary excess

Compulsory excess is set by the insurer and isn’t optional. Voluntary excess is chosen by you and usually affects the price you pay for insurance. When you claim, they typically combine into one total amount you’re responsible for.

Choosing the right voluntary excess is really about balance: keeping your premium affordable without putting yourself in a position where you couldn’t comfortably pay the excess if you needed to claim.

Marshmallow offers car insurance designed for people new to the UK, with quotes that make it easy to see what you’re paying now and what you’d pay if you needed to claim.

To see what you could save,get your free, no-obligation quote today.