Car insurance excess explained 

An excess is the amount you pay towards the cost of your claim for each incident covered by your policy. The total excess you are required to pay is determined by the circumstances of your claim.

There are different types of excess, including:

• standard excess
• voluntary excess
• age excess
• inexperienced driver excess, and
• driver history excess.

These may or may not apply to you, depending on your circumstances.

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Why do I need to pay Car Insurance excess?

Car insurance excess helps to cover the cost of repairing and replacing insured vehicles, keeping policies affordable. It also helps to prevent people claiming too often and for minor things. In that sense, excess makes insuring your car possible for the insurer.

Are there different types of excess?

There are different types of excess, and you might see them called different things across different providers. At GIO, we have:

Standard excess

This is the amount you’ll pay for all claims unless your insurance policy states no excess applies. Your standard excess is calculated based on things such as:

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

Voluntary excess

A voluntary excess is an amount you might choose to pay on top of your standard excess, depending on the type of car cover you have. Selecting a higher excess can reduce your regular premium payments.

Age excess

An additional excess may apply to drivers under the age of 25 if they were driving, using or in charge of the car at the time of the incident. It also applies to learner drivers and is in addition to any other excess that applies. If the driver is listed on the policy, this excess will be lower than if they aren’t.

Inexperienced driver excess

If the driver is 25 or over and has held their licence for less than two years, they will need to pay the inexperienced driver excess at claim time. Like the Age excess, this excess also applies to learner drivers and is in addition to any other excess that applies. This amount will be less if the driver is listed on the policy than if they are not listed on the certificate of insurance.

So, if an inexperienced driver or driver under 25 regularly uses your car, it might be worth adding them to your policy. Find out how to add a listed driver to your policy.

Driver history excess

This excess applies if a listed driver has had their licence cancelled, suspended, disqualified or restricted in the 3 years prior to the start of the period of insurance was driving, and were using or in charge of the car at the time of the incident.

When do I need to pay Car Insurance excess?

Some claims will attract additional excesses along with a standard and voluntary excess, while some claim types won’t attract an excess at all, depending on the circumstances. Have a look at the table below to find out when excess is and isn’t charged. You can also find out more in the Additional Insurance Guide (AIG).

When does an excess apply: GIO

Using your excess to save on your car insurance premium

You might choose to adjust your excess to save on your premium. People might do this with the expectation they won’t have an incident that incurs an excess. But, as we all know, accidents happen. You could try and strike the balance between a premium you’re comfortable with and an excess that won’t leave you broke, should you need to claim.

When you get a quote, you’ll have the option to adjust your excess and see how it affects your premiums.

Read more:

• CTP Insurance and MAI: what do they cover?
• 12 must-have accessories for your car
• What is GIO Claims Free Savings?

Insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Consider the Product Disclosure Statement before buying this insurance. The Target Market Determination is also available.

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.