How Excess Works on a Home Policy
Your excess is what you pay toward a claim before the insurer covers the rest. Most home policies let you choose a 'standard excess' (often $500–$750), but many insurers also apply separate, higher excesses for specific risks — flood, storm surge or bushfire in high-risk postcodes can carry their own excess on top of the standard one.
The Trade-Off
Choosing a higher voluntary excess lowers your premium, sometimes significantly — but it means a bigger out-of-pocket cost if you claim. As a rule of thumb, only raise your excess to an amount you could genuinely cover in cash without financial stress if a storm hit tomorrow.
Watch for Stacked Excesses
Some policies apply the standard excess plus an additional 'named risk' excess for the specific event that caused the damage — meaning a burst pipe during a declared flood event could trigger two excesses, not one. Always check the PDS for how excesses combine.
A Quick Way to Decide
- Get quotes at two or three excess levels ($500, $750, $1,000) and compare the premium difference against what you'd actually pay if you claimed
- If you're in a low-risk postcode with no recent claims, a higher excess for a lower premium is usually the better long-run bet
- If you're in a bushfire, flood or cyclone-prone area, check the specific named-risk excess before assuming the 'standard' excess is what you'll pay
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.