Car insurance premiums are climbing, leaving drivers searching for ways to trim costs without sacrificing coverage. Motor insurance is the mandatory, you must have it to drive on the roads in the UK.

 

What is the average claim value on motor insurance?

 

When considering the cost of your motor insurance premium, and whether to take a higher voluntary excess, it may be worth noting that the Association of British Insurers (ABI) reported that the average cost of a motor insurance claim rose from £3500 in 2014 to £4300 in 2023.

 

To add context to this, GAP Insurance claims for our customers averaged over £7000 in 2024.

 

They also reported that there are around 2.3 million motor insurance claims each year.

 

So essentially the chances of making a claim are relatively small but the relative costs of a claim are quite high.  

 

What if we told you there’s a proven, easy way that could lower your insurance premium?

 

The trick? Increasing your voluntary excess.

 

By adjusting this one factor, you could save hundreds of pounds a year on your car insurance. But before you start tweaking your excess levels, it’s important to understand the risks, the potential savings, and how to protect yourself from unexpected costs.

 

Let’s break it down.

 

But before go any further, this is not a recommendation or advice. This is something we found and it may not work for everyone. Please consider this as an educational article to form part of your research. Their are pros and cons to this method so please do your own homework to make your own, informed decisions.

What Is Car Insurance Excess?

 

When you make a claim on your car insurance, the excess is the portion you have to pay before your insurer covers the rest. There are two types:

 

Compulsory Excess – Set by your insurer and non-negotiable.

 

Voluntary Excess – The amount you agree to pay on top of the compulsory excess in exchange for a lower premium.

 

The logic behind voluntary excess is simple: if you're willing to cover more of the initial claim costs, insurers see you as a lower risk and reward you with cheaper premiums.

How Much Can You Save? (Real-World Example)

 

We ran a pricing experiment on comparison sites using a 2024 Mazda CX-60 valued at £37,000. The driver, a 52-year-old with 10 years of no claims bonus, requested a fully comprehensive quote for 6000 miles a year. The quote was taken in February 2025.

 

We adjusted only the voluntary excess while keeping all other details the same. Here’s what we found:

Voluntary Excess	Cheapest Quote (£)	% Savings	Total Excess Payable
£0	£758.71	0%	£250-£400
£250	£583.34	23.1%	£500-£650
£500	£547.09	27.9%	£750-£900

 

Key Takeaways:

• Increasing your voluntary excess from £0 to £500 could slash your premium by nearly 28%.

• The sweet spot for voluntary excess is around £500-£1,000—going beyond this doesn't always result in bigger savings.

 

The Catch: Can You Afford the Excess?

 

While opting for a higher voluntary excess reduces your premium, it also means you’ll need to pay more out-of-pocket if you need to claim. If your total excess (compulsory + voluntary) is £900, you’ll be covering that amount yourself before your insurer pays anything.

 

Example Scenario:

• You’re involved in a minor accident, and the repairs cost £2,000.

• Your total excess is £900.

• You pay £900, and the insurer covers the remaining £1,100.

 

If an accident happens, could you comfortably cover that cost? If not, there’s a way to protect yourself.

 

How Motor Excess Insurance Protects You

 

Motor Excess Insurance protection is a separate policy that reimburses you for any excess you have to pay when making a claim on your main insurance.

 

How it works:

1. You pay the excess on your claim (e.g., £900).

2. You claim this back from your Motor Excess Insurance policy.

3. You’re refunded up to the limit of your excess cover.

 

Using our earlier example, let’s say you took out a £1,000 Motor Excess Insurance policy. Instead of losing £900 to your insurer, you get it back—meaning you still enjoy the 27.9% cheaper premium but don’t face any financial risk.

 

Cost Breakdown:

• Annual savings from increasing excess: £211.62

• Cost of Motor Excess Insurance: £39.99 per year (for £1,000 cover)

• Net savings: £171.63 per year

 

Not a bad trade-off!

 

Should You Raise Your Voluntary Excess?

 

Yes, If:

• You want to lower your premium significantly.

• You’re confident you won’t need to claim often.

• You’re willing to protect yourself with Motor Excess Insurance.

 

Think Twice, If:

• You can’t afford to cover a large excess if you do claim.

• You drive in high-risk areas or have a history of frequent claims.

 

Final Thoughts: The Smart Way to Save?

 

Raising your voluntary excess is one of the easiest and most effective ways to cut your car insurance premium. But it’s not a one-size-fits-all solution—you need to find the right balance between savings and affordability.

 

Key Takeaways:

• Increasing voluntary excess can slash premiums by up to 27%, or more. 

• Make sure your total excess amount is something you can afford to pay in case of a claim.

• Use Motor Excess Insurance to mitigate the risk and still enjoy lower premiums.

 

Want to lock in cheaper car insurance without the financial risk? Get a quote for Motor Excess Insurance today and start saving!