When buying your home insurance policy, you can choose to pay a voluntary excess on top. This guide will help you to understand what voluntary excess is, and whether it’s a good choice for you.
In this guide:
What is voluntary excess on your home insurance?
Voluntary excess is an optional payment which you will pay if you make a claim on your insurance. This is paid on top of your compulsory excess, which is the amount you are required to pay in the event of a claim.
At Stanhope, our standard policies start with £100 compulsory excess, and go up in increments of £100 up to a maximum of £1,000.
Our high value home policies (premiums £3,000+) start with a £250 compulsory excess. It then goes up as follows:
- £250
- £500
- £1,000
- £2,000
- £5,000
- £10,000
Any amount that you choose over the £250 would be classed as your voluntary excess.
For our subsidence insurance, the excess is always fixed at £1,000. Voluntary excess does not usually affect the subsidence excess but it can do. Be careful to check your insurance schedule.
Voluntary excess is something that you can decide on at the beginning of your home insurance journey. If you’re unsure when to get insurance in the house buying process, read our guide here
Do you have to pay voluntary excess?
No, you don’t have to pay a voluntary excess – as the name suggests, it’s a voluntary addition to your policy. However, people choose to pay a voluntary excess, on top of their compulsory excess, to bring down the cost of their home insurance.
How much voluntary excess should you pay on your home insurance?
You need to make sure that if you are adding a voluntary excess, you will be able to afford both the voluntary and compulsory excess in the event of a claim.
We would advise you to choose a higher voluntary excess if:
- You have a claims free history (no claims within 5 years).
- The savings are greater than 50% of the increased excess.
For example – if going from a £250 to £500 excess saves the prospect over £125, then we would recommend choosing this. In other words, take the guaranteed saving instead of the potential saving in the event of the claim.
Is voluntary excess worth it?
Voluntary excess can reduce the cost of your home insurance policy, and bring down your monthly payments.
You should base the amount of voluntary excess on your disposable income – how much do you have saved in the event of an emergency?
It’s always worth weighing up the pros and cons of paying less each month against paying more in the event of a claim. We would recommend taking financial advice if you are unsure about what you can afford. For example, we have clients willing to have a £10,000 excess as they are confident any damage up to that value can be repaired at their own expense.