What Excess Actually Is
Your excess is the amount you pay toward a claim before your insurer covers the rest. Most policies combine a fixed 'basic excess' set by the insurer with a 'voluntary excess' you choose yourself — the higher your voluntary excess, the lower your premium, since you're taking on more of the risk yourself.
The Trade-Off in Practice
Raising your voluntary excess from, say, $500 to $1,000 typically lowers your annual premium by a noticeable amount — often enough to offset the higher excess within 2-3 years if you don't claim. But if you do claim in year one, you're immediately $500 worse off than you would have been on the lower excess.
How to Choose the Right Excess
- Set your excess at an amount you could pay from savings without financial stress right now, not what you hope you could manage
- If you rarely claim and drive carefully, a higher excess for a lower premium is usually the better long-run bet
- If you have young or new drivers on the policy, some insurers add an extra 'age excess' on top — factor that into your total exposure
- Compare the premium difference in dollar terms across a few excess levels rather than guessing — most insurers show this instantly when getting a quote
Age-Based Excess
Many insurers add an additional excess for drivers under 25, on top of your standard excess, reflecting the higher claims rate in that age group. Some insurers (like ROLLiN') specifically waive this for under-25 drivers — worth checking if a young driver is on your policy.
This page is for educational purposes and isn't personalised financial advice. Premiums, terms and eligibility vary by insurer, state and individual circumstances — always check the Product Disclosure Statement (PDS) before buying.