Understanding Excess Insurance in the UK

Excess insurance is often referred to as “deductible insurance” in other parts of the world. It is a supplementary form of coverage that provides financial protection against excess costs associated with a primary insurance policy. In the United Kingdom, this type of insurance has gained popularity in recent years. Consumers seek to mitigate the financial burden of high excess charges imposed by their primary insurance policies. This article aims to provide a comprehensive understanding of excess insurance in the UK. Including its purpose, benefits, and how it works.

Excess insurance in the UK

What is Excess Insurance?

Excess insurance, as the name suggests, is a type of policy that covers the excess (also known as a deductible) that policyholders must pay in the event of a claim under their primary insurance policy. The primary insurance policy can be any type of coverage, such as car insurance, home insurance, or travel insurance. In the UK, excess insurance is most commonly associated with motor insurance and is often referred to as “excess reimbursement insurance.”

The Purpose of Excess Insurance

The primary purpose of excess insurance is to provide financial relief to policyholders when they make a claim. In the UK, many insurance policies come with a mandatory excess, which is the amount the policyholder must contribute towards a claim before the insurance company starts covering the remaining costs. Excess insurance helps individuals recover the amount they are required to pay out of their pocket as part of their primary insurance policy. This additional coverage can be precious when a policyholder faces multiple claims or has a high excess amount.

Benefits of Excess Insurance

  • Financial Security: Excess insurance provides policyholders with peace of mind, knowing that they won’t be burdened with a substantial upfront cost in the event of a claim. This can be particularly important for individuals who have chosen higher excess amounts to reduce their premium costs.
  • Cost Savings: Excess insurance can be more cost-effective than increasing the excess on a primary insurance policy. By opting for higher excess insurance coverage, policyholders can still enjoy lower premiums on their primary policy while protecting themselves from excessive out-of-pocket expenses.
  • Convenience: Excess insurance is often easy to obtain, and it can be tailored to the specific needs of the policyholder. This flexibility makes it a convenient solution for those looking to protect their finances without altering their primary insurance policy.

How Excess Insurance Works

Excess insurance is designed to work in conjunction with a primary insurance policy. Here’s how it typically works:

  • Primary Insurance Policy: A policyholder first purchases a primary insurance policy, such as car insurance or home insurance. This primary policy includes a mandatory excess amount.
  • Claim Occurs: If a claim occurs, the policyholder pays the excess amount as required by the primary insurance policy.
  • Excess Insurance Claim: After paying the excess, the policyholder can then submit a claim to their excess insurance provider, requesting reimbursement for the amount paid as excess.
  • Reimbursement: If the claim is approved, the excess insurance provider will reimburse the policyholder for the excess amount paid under the primary insurance policy.

Choosing an Excess Insurance Policy

When selecting an excess insurance policy in the UK, consider the following factors:

  • Excess Amount: Ensure that the excess insurance policy covers the same excess amount as your primary insurance policy. Some policies may cover a set limit per claim, while others offer an annual aggregate limit.
  • Policy Coverage: Review the terms and conditions of the excess insurance policy to understand what is and isn’t covered. Some policies may exclude certain types of claims or circumstances.
  • Premium Costs: Compare premium costs among different excess insurance providers. It’s essential to find a balance between affordable coverage and adequate protection.
  • Claims Process: Understand the claims process for the excess insurance policy, including documentation and filing requirements.


What is excess insurance in the UK?

Excess insurance, also known as excess reimbursement insurance, is a supplementary insurance policy designed to cover the excess (or deductible) amount that policyholders are required to pay when making a claim under their primary insurance policy.

What types of primary insurance policies can be complemented with excess insurance in the UK?

Excess insurance can be used to complement various types of primary insurance policies, including car insurance, home insurance, travel insurance, and more. It’s most commonly associated with motor insurance in the UK.

How does excess insurance benefit policyholders?

Excess insurance benefits policyholders by providing financial relief when they need to pay the excess amount under their primary insurance policy. It offers financial security, cost savings, and convenience.

When should I consider purchasing excess insurance?

Excess insurance is particularly valuable if you have a primary insurance policy with a high excess, as it helps you avoid significant out-of-pocket expenses in the event of a claim. It’s also useful when you want to keep your primary insurance premium lower by choosing a higher excess.

Is excess insurance mandatory in the UK?

Excess insurance is typically optional, and whether or not you need it depends on your individual circumstances and preferences. It’s not a legal requirement in the UK, but it can be a valuable addition to your insurance coverage.

How do I file a claim for excess insurance in the UK?

When a claim occurs, you should first pay the required excess amount as mandated by your primary insurance policy. Afterward, you can submit a claim to your excess insurance provider, usually with the required documentation. If your claim is approved, the excess insurance provider will reimburse you for the excess amount paid under the primary policy.

Are there exclusions in excess insurance policies?

Excess insurance policies may have specific exclusions, and it’s crucial to review the terms and conditions carefully. Some policies may exclude certain types of claims or circumstances, so understanding the policy’s coverage is essential.

Can I choose different excess insurance providers than my primary insurance provider?

Yes, you can choose a different provider for your excess insurance. In fact, it’s often advisable to shop around and compare different excess insurance policies to find the one that best suits your needs and budget.

How much does excess insurance cost in the UK?

The cost of excess insurance varies depending on factors such as the type of coverage, the amount of excess you want to cover, and the insurance provider. Premiums for excess insurance are typically more affordable than the increased premium costs associated with reducing your primary insurance excess.

Is excess insurance a one-time payment, or do I pay it annually?

The payment structure for excess insurance may vary depending on the policy. Some excess insurance policies are annual, while others may cover a set limit per claim. It’s essential to understand the payment terms before purchasing a policy.

Read more: The Future Of Car Insurance: A Roadmap To Smarter Coverage


Excess insurance in the UK offers a practical solution for individuals looking to protect themselves against high excess charges associated with their primary insurance policies. It provides financial security, cost savings, and peace of mind, making it a valuable addition to the insurance landscape. When considering excess insurance, it’s essential to carefully assess your primary insurance policy, determine your needs, and select an excess insurance policy that aligns with your financial goals and requirements. By doing so, you can enjoy the benefits of both primary and excess insurance, ensuring comprehensive coverage for various unexpected events.

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