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What is car insurance excess?

An excess is the out-of-pocket payment you make when you claim on your insurance. It’s a set amount, agreed to at the beginning of your period of insurance, and can be a fraction of what you’d need to pay to cover the full cost of repairs. After all, paying the full cost of repairs can be a huge financial burden, especially if you’re on a tighter budget or aren’t working full time. Having one excess amount to pay can be a lot simpler.

How does car insurance excess work?

Once you’ve lodged a claim, you can pay your excess. Your insurer will then pay the remaining cost of repairs. In some situations, you may not need to pay an excess at all.

For example, you may have a car accident where the cost of repairs is $1,200. You have comprehensive car insurance, and, let’s say, an excess of $600 when making a claim. You lodge a claim for the accident and pay your insurer the excess amount of $600. Your insurer will then pay the remaining $600 to cover the cost of repairing your vehicle.

Types of excess

There are a few different types of car insurance excess, and you may have to pay more than one type of excess depending on your circumstances.

Standard excess

Standard excess, sometimes called basic excess, is the amount you’d usually pay regardless of the circumstances surrounding your claim. It’s dependent on a number of factors, which may include:

  • your car type
  • where you live
  • your policy type, and
  • your claims history.

Imposed Excess

On some occasions, you may have to pay an imposed excess instead of a standard excess. This is where your claims history and car type can impact which excess you’ll be asked to pay. An imposed excess is usually higher than a standard excess, but works in the same way regardless of the circumstances surrounding your claim.

Chosen variable excess or voluntary excess

Chosen variable excess is an amount you agree to pay on top of your standard excess. Some people prefer a variable excess, as it can reduce your premium. If you’re someone who doesn’t drive much, it might make more sense for you to lower your premium by paying a variable excess. When you get a quote online with Apia, you’ll see a number of different excess options. Your premium amount can change depending on which one you select.

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Age excess or drivers under 25 excess

An age excess may apply if you’re under 25, and it’s generally in addition to your standard excess. This can vary depending on whether the driver is listed on the policy or not. Note that this also applies to learner drivers who are under the age of 25.

Inexperienced driver excess

Some insurers may also have an inexperienced driver excess. Separate to an age excess, an inexperienced driver excess may apply if the driver is over 25, but has only had their license for a period of less than 2 consecutive years, or is a learner driver. Again, an inexperienced driver excess is usually paid in addition to your standard excess amount, and will be higher if the driver isn’t listed on your policy.

Driver history excess

Depending on your insurer, you may also have a driver history excess. A driver history excess usually applies if there’s been some kind of restriction on the listed driver in the past. This could mean the driver involved in the accident has had their license suspended, cancelled, disqualified, or restricted in some way in the 3 years prior to the period of insurance.

When do you need to pay an excess?

If you are in a car accident where you were at fault, you’ll need to pay an excess when you make your claim. This could be your standard excess alone, or the standard excess plus additional excess if, for example, an age excess is applicable to the driver.  If the other driver is determined to be entirely at fault, and you can provide their details (their name, address, and registration number), you won’t have to pay an excess.

How do you change your car insurance excess?

You can choose your excess amount when you get a Comprehensive Car Insurance quote online with Apia. Your premium will also change depending on the excess amount you choose. To find out more about how you can drive less and pay less with Apia, check out our Comprehensive Car Insurance page.

Check out Comprehensive Car Insurance

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Australian Pensioners Insurance Agency Pty Limited ABN 14 099 650 996 is an authorised representative of AAI Limited ABN 48 005 297 807, the product issuer. Read the Product Disclosure Statement before buying this insurance. The Target Market Demographic is also available. Go to for a copy.

This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.

The information is intended to be of general nature only. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.

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