What is Home Insurance Excess? UK Guide
Home insurance excess is the amount you agree to pay towards a successful claim before the insurer covers the rest. It sits at the heart of every home insurance policy and affects both the price you pay and what you receive at settlement. rivr follows standard UK practice where policy excess is set per section and stated in the schedule and policy documents.
This article is general information, not advice, and reflects how most insurers handle excess across the market.
What is an insurance excess?
An insurance excess is the first part of a claim that you pay yourself. The insurer then settles the remainder, up to the policy limit. As stated by ABI, the customer pays the first portion and the insurer covers the rest.
In home insurance, there are two different types of excess.
- A compulsory excess is set by the insurance company and cannot be changed.
- A voluntary excess is your choice.
When you make a claim, the total excess is usually the sum of both the compulsory excess and your chosen voluntary excess. This total amount is normally deducted from the settlement, rather than you having to pay cash up front.
Voluntary vs compulsory excess: the difference that drives price
Voluntary and compulsory excess are often shown separately on your schedule, but they both affect the price you pay for home insurance. A higher voluntary excess can mean a lower premium because you share more risk with the insurer. That can make cover cheaper, but only if you will not struggle to pay the excess if a loss happens.
Your home insurance policy may also apply a separate compulsory excess to particular sections. You can expect insurers to use different excesses where claims are frequent or severe. Always review your policy documents so you understand what you would need to pay in each section before you make a claim.
Typical excess amounts by claim type
Excess amounts vary depending on the section and circumstances. Here is what you can generally expect on UK home insurance:
Subsidence claims
According to the ABI, most insurers set subsidence excess around £1,000, though it can be higher in some circumstances
Escape of water and water claims
Many policies apply an additional excess because leaks drive a high volume of repairs. A rough average in the market is £250–£500, depending on the insurer.
Accidental damage.
Some policies set a standard amount while others mirror the main policy excess. Check whether the excess amounts differ for buildings compared with contents insurance.
Storm damage.
Most policies apply the usual section excess to wind or roof damage. Review exclusions for wear and tear which are not cover.
Personal belongings away from the property.
Portable items covered outside the home may carry their own excess.
For flood claims ceded to Flood Re, the excess is fixed at £250 per claim and replaces any other compulsory or voluntary excess.
How much voluntary excess should you choose?
The right level depends on what you can comfortably afford at short notice. Ask yourself how much voluntary excess fits your budget without creating financial stress. Choosing a higher excess may reduce the price you pay today, but it increases the additional cost you face at settlement. While voluntary excess can help secure a lower premium, the trade off is paying more if you make a claim.
As a rule of thumb, pick a level you could afford from savings. If the excess would push you to pay on credit, it is likely too high. Consider how often you would claim for low value claims and whether you are comfortable self insuring smaller losses.
Buildings and contents insurance: will I pay one excess or two?
Combined buildings and contents insurance can be triggered by a single event, like a major leak damaging structure and stolen belongings during the same incident. Some policies charge one excess per incident, while others apply an excess per section.
Ppolicy wordings determine how insurers' settlement methods operate for home insurance and why section-by-section terms matter.
Ensure yourRead your policy documents closely. Look for whether one exception applies, for example where liability claims carry no excess, or if a section has a separate compulsory excess.
Can your excess be refunded?
If a third party is responsible, your insurer may attempt to recover its outlay. Where recovery succeeds, you may see your excess refunded. The Financial Ombudsman Service (FOS) publishes case decisions that illustrate how this works in practice. In one decision, an insurer’s recovery agent had pursued both the claim costs and the customer’s own excess from the at-fault party.
Remember, tecovery is not guaranteed. Outcomes depend on evidence, liability and the other party’s insurer. Keep invoices and photos, and cooperate with any enquiries so your insurer can pursue recovery.
How the deduction works in practice
Example 1. A storm damages your roof and water ruins a ceiling. Your claim amount is £3,000 under buildings. Your compulsory excess is £150 and your voluntary excess is £250. The total excess is £400. The insurer covers £2,600 and the £400 is deducted from the payout.
Example 2. A burst pipe triggers both buildings and contents insurance sections. One policy may charge one excess per event. Another may apply an excess to each section. Always verify the rule in your policy documents before you make a claim.
Legal expenses cover and excess
Many policies offer legal expenses cover or a legal helpline as an add on. Legal expenses are controlled by the insurer’s appointed lawyers with advance approval of costs.
Some services under legal expenses come with a nil excess, while others may apply a small charge, depending on the provider. Check the add on wording, as terms and any limit will be set in the policy documents.
No claims discount and excess decisions
Some home insurance providers offer a no claims discount in a policy year, although practices vary depending on the provider. However, the size and rules are a matter for each insurer and you should check your policy documents.
For some smaller losses, paying out of pocket avoids using up any discount and the need to pay excess on low value claims. Balance this against the benefit of having your insurer manage the repairs and any knock on issues.
Choosing an excess level: practical pointers
Start with your emergency fund. Pick a voluntary excess you can comfortably afford without borrowing. Model different excess amounts against the price offered at quote. If a higher excess reduces the premium only marginally, the trade off may not be worth it.
Remember that some sections carry a separate compulsory excess. For example, subsidence and certain water claims often carry higher set figures across UK home insurance.
Finally, check if your home insurance sits within Flood Re for flood cover, which currently uses a fixed £250 flood excess on ceded claims
Checklist: avoid pitfalls
rivr: Digital-first cover for high value homes
rivr is a high-value, digital-first home insurance provider built around the needs of modern lifestyles. We provide tailored home insurance with clear limits, optional add-ons, and support to make a claim when needed.
We keep claims simple by applying one excess per incident across buildings, contents and liability starting at £500. If a covered claim exceeds £25,000, our Large Loss Excess Waiver removes the excess, except for subsidence or where an increased excess is stated.
Our combined policy protects high-value homes and possessions worldwide, with clear limits and straightforward support if you need to make a claim.
Contact us today and experience home insurance tailored to your lifestyle.
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Frequently asked questions
A compulsory excess is set by your insurer and a voluntary excess is chosen by you. Together they form the total excess that is deducted from any payout on a successful home insurance claim. MoneyHelper explains that voluntary and compulsory excess both influence the premium and overall cost of home insurance.
Pick a level you can comfortably afford without borrowing. Testing higher voluntary excess at quote will show if the saving is meaningful. If the premium only drops slightly, the trade off may not be worth it. Think about circumstances where you may need to pay excess, especially on low value claims. Always check your policy documents.
Yes. Subsidence claims often carry around £1,000, and some water claims have additional sums. This is a separate compulsory excess, shown in your schedule. You can expect insurers to apply different excesses where risks are more severe.
Not always. With combined buildings and contents insurance, some policies apply one excess per incident, while others apply an excess to each section. Your policy documents will state which rule applies. The FOS notes this can make a big difference to the final settlement.
With rivr, if the same incident damages both your home’s structure and your belongings, you only pay one excess for the whole claim. You will not be charged separately for buildings, contents or liability cover (shown as Sections 1–3 in your policy wording).
If a third party is liable and your insurer recovers costs, you may have your excess refunded. Recovery is not guaranteed, but if successful it can also protect your no claims discount.
The general rule is that you need high-value home insurance if you meet any of the following criteria:
- The rebuild value of your home is over £1 million
- Your general contents are worth over £100,000
- You have valuable items that together are worth over £30,000
The policy is insured by two of the largest insurance companies in the world, which are both A-rated for their financial strength. The Buildings, Contents and Liability cover is insured by HDI Global Specialty SE. The Home Emergency and Family Legal Protection cover is insured by AmTrust Specialty.
