What is car insurance excess?

Last updated on June 27, 2023
When you take out a car insurance policy, you’ll notice it specifies a payment called an excess. This may be a set amount, or you may be able to choose from several options. In this article, we break down the details of car insurance excess so you can make a more informed decision.
Excess is the amount you must pay before your insurer will begin to contribute to your claim. The easiest way to understand excess is through an example. Imagine your car is damaged in a covered accident and needs $3,000 of repairs. If your policy has a $500 excess, then you’ll need to pay the $500 excess and your car insurance will cover the remaining $2,500 for the cost of repairs.

Your insurance premium is the monthly or yearly amount you pay for your cover. Your insurance excess is your contribution towards any claim you make that is covered by your policy. While these are separate payments, the amount of excess you choose to pay can affect your premium.

With our Comprehensive Car Insurance, we offer you the choice to increase your excess to lower your premium. Or you can choose to lower your excess and pay a bit more on your premium.

Get an Allianz Comprehensive Car Insurance quote today to understand your options.

In most cases when you make a claim, you’ll need to pay the excess stated in your policy. If we determine you're not at fault for the accident and you can provide the responsible party’s details, you won't have to pay an excess.

You’ll need to get details that would allow us to reasonably identify the person at fault, so that we can recover our costs. Make sure you get all the necessary information before leaving the site of an accident. The information you need to provide to us is detailed in the Product Disclosure Statement (PDS) for your car insurance policy.

Most of the time when insurers talk about excess, they’re referring to basic excess. This is the amount you must pay as a contribution to each claim. Your policy may also include other kinds of excess as well, that are payable in addition to the basic excess. For example, there can sometimes be an additional excess amount where the driver is under 25 or inexperienced. There may also be other types of excess. You should review your policy documents and PDS for details on the types of excess relevant to you.

The cost of your excess is listed in your car insurance policy. When you take out Comprehensive Car Insurance with Allianz, you’ll have the choice to adjust your excess, changing the cost of your premium. If you raise your excess, this will decrease the cost of your premium. You may have to pay the excess amount when you make a claim.

On the other hand, reducing your excess will raise the cost of your premium. So, when making this decision, consider what is right for you and your circumstances.

Remember when changing your excess, that you may end up in a situation where you must make a payment for a claim that you submit. Essentially, the excess is seen as an additional payment at the time of a claim. If you don’t pay the excess, this may cause issues with claims or potential legal cover you may have with your insurance.

Situations you’re required to pay the excess to your insurance include, but aren’t limited to the following:

  • The reason for your claim is because you were the at fault driver.
  • Damage caused to the vehicle was made due to a weather event.
  • If the at fault driver’s details are incorrect, unavailable or you’re unable to get them at the time of the incident.

You may need to pay a set excess for specific claims, such as an age excess. The specific excesses are outlined in the insurance policy.

Our Comprehensive Car Insurance offers you the flexibility to adjust your excess within set limits to a level that suits you. Get an Allianz Comprehensive Car Insurance quote today to understand your options.

This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 ("Allianz"). In some cases, information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way.

Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.

Allianz acknowledges Aboriginal and Torres Strait Islander peoples as the Traditional Custodians of the lands on which we live and work across Australia. We pay our respect to First Nations Elders past and present.

Any advice here does not take into account your individual objectives, financial situation or needs. Terms, conditions, limits, and exclusions apply. Before making a decision about this insurance, consider the relevant Product Disclosure Statement (PDS)/Policy Wording and Supplementary PDS (if applicable). Where applicable, the PDS/Policy Wording, Supplementary PDS and Target Market Determination (TMD) for this insurance are available on this website. We do not provide any form of advice if you call us to enquire about or purchase a product.

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