Home Insurance Excess: What, Why, and How Much?
Caeva O'Callaghan | September 13th, 2023
A home insurance excess is a flat fee you’ll pay when you make a claim. Not all excess is created equal – find out more inside.
In a nutshell, your excess is a fixed amount that you have to pay out if you make a claim on your insurance. Think of it as the price of making a claim.
Your insurer will deduct your excess from the full amount. Excesses vary from policy to policy, so make sure you know yours well before you need to pay it.
In this article, we’ll answer questions like:
- What is a home insurance excess?
- Why do I have to pay an excess on my home insurance?
- How do I find out my home insurance excess?
Thousands of people are caught out because they don’t know what the excess is, or why it has to be paid. So, before you make a claim, make yourself aware of the facts.
What is a Home Insurance Excess?
Excess is the amount you pay towards a claim before your home insurance provider makes its contribution. For example if your excess is €250 and you make a claim for €1,000, your insurer will pay out €750.
There are two types of excess, compulsory and voluntary. Compulsory is a flat fee which is set by your insurance provider. Not every policy will have a compulsory excess, but a lot of them will.
On the other hand, you agree a voluntary excess with your insurance provider, and it usually means you pay a lower monthly or annual premium. It means that in exchange for your lower price, you’d pay more if you were to make a claim.
Increasing your excess may save you money on your premium. But you don’t want to be landed with an excess if the worst happens and you can’t afford to pay.
Why do I have to pay an excess on a Home Insurance Claim?
An excess is a typical home insurance fee. It’s simply the cost of doing business. An excess guarantees the insurance company will be able to pay for costs related to managing your claim.
An excess also deters customers from making claims when they don’t need to. In lots of cases, it’s easier – and cheaper – to manage the damage yourself and not involve your insurance provider. For example, if there’s a small flood in your bathroom it will be more beneficial to all involved if you grab a mop or call a plumber.
Tying things up in insurance claims is a lot of time and effort on everyone’s behalf, so make sure it’s worth it. Charging an excess helps to keep the cost of premiums down by reducing the number of small claims.
For instance, there’s no point making a claim to replace a €300 window if the excess is €800. Why? You’d be paying €800 to get €300 back – it isn’t worth it.
Typical amounts of excess
If you’re concerned you’re paying too much for your home insurance excess, you can give us a call and we’ll set you right.
The amount of excess you need to pay will depend on what’s covered in your individual policy. For example, Zurich’s standard home insurance policy excess is €250. • Excess normally varies between €250 and €375.
However, their personal money excess is only €50, while if a landslip damages your home the excess is €2,500. Excesses are usually much higher when there’s larger amounts of money involved.
Reducing the cost of your home insurance
Bigger excesses save money for insurance companies, but they can also save you money on your monthly or annual premiums.
You might be paying €100 a month for insurance, for example, when you have a house fire. The cost of repairing your home will be around €10,000.
If your excess is €500, it will be deducted from the final amount and the remaining €9,500 will be used to cover repairs. You need to make sure all costs, including the excess, can be covered by the amount you claim.
If you want to reduce your premium from €100 a month to €75 a month, you might be able to increase your excess to €1,000. It varies from insurer to insurer.
One insurance company, Aviva, offers a discount for an increased excess of €1,000 but only on its “value” policy. We do not recommend this policy, for many reasons.
As always, give us a call and we can discuss possible ways to lower the cost of your home insurance.
If you have any questions around Home Insurance Excess, Call us in QuoteMe.ie
If you have any queries at all regarding home insurance excess and what are the options for your home insurance policy, feel free to call us and talk to our trained insurance advisors. We are experts in all things related to home cover, and we have seen all eventualities and can guide you appropriately. We are available for direct phone calls between 8.30am and 5.30pm each weekday on 0818 224433 or 042 9359051.