Around 60% of UK home insurance policies set their buildings excess at £250, but the amount you actually pay out of pocket when something goes wrong can be far higher — and many property owners only realise this when they make a claim. The average combined buildings and contents premium was £225 at the end of 2025, down 2.6% from the year before. Yet total UK property insurance payouts are expected to hit a record £6.1 billion in 2025, with adverse weather claims alone reaching £936 million in the first nine months — up 21% on the same period in 2024. That gap between falling premiums and rising claims is where the excess sits, and it matters more than the headline price of your policy.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
Your insurance excess is the amount you contribute before the insurer pays the rest. Get it wrong, and you could end up with no payout at all on a claim you thought was covered. Here’s what you actually need to know.
Key Takeaways: What Excess Means for Your Wallet
Your insurance excess is the amount you agree to pay towards any claim before your insurer covers the rest. It’s not an extra fee — it’s a share of the risk. Insurers use it to discourage small claims and keep premiums lower for everyone. The total excess is made up of two parts: compulsory excess, which the insurer sets based on your property’s risk profile and the type of claim, and voluntary excess, which you choose when you take out or renew the policy. What I tend to notice is that most people focus on the monthly premium and forget to check the excess until something goes wrong. By then, the number is already baked into the policy.
Knowing the difference between compulsory and voluntary excess — and how they add up — is the first step to making sure your policy actually works when you need it. If you’re also looking at how different types of damage are handled, it’s worth reading our guide to building damage coverage under UK property insurance.
Excess Levels by Claim Type: The Numbers You Need to Know
Not all claims are treated the same. Insurers set different compulsory excesses depending on the type of damage, and those differences can be huge. The table below shows the typical ranges you’ll see across the market.
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| Claim Type | Typical Compulsory Excess | What It Means |
|---|---|---|
| Theft | £100–£250 | Higher if high-value items are involved |
| Escape of water | £250–£500+ | One of the most common and costly claim types |
| Storm / flood | £100–£350 | Flood-prone properties may have higher excess or Flood Re cover |
| Accidental damage | £100–£300 | Often depends on whether you added optional cover |
| Subsidence | £1,000–£2,500+ | Average severe repair cost: up to £75,000 |
For me, the subsidence figure is the one that catches most people off guard. A standard compulsory excess of £1,000 or more means you’re covering the first chunk of a problem that can cost tens of thousands to fix. If your property is in an area with clay soil or historic mining, that excess is non-negotiable. The subsidence risks and insurance implications are worth understanding before you buy.
Choosing a voluntary excess of £300 typically saves you around £25 a year on your premium. That sounds like a deal until you realise a single claim can wipe out years of savings. The data on premium differences backs this up: buildings insurance averages £176.75 with a £250 excess, compared to £193.92 with £0 excess — a saving of just over £17 a year. Contents insurance shows a similar pattern: £57.37 with £250 excess versus roughly £66.80 with £0 excess.
Common Mistakes Property Owners Make with Excess
Picking a voluntary excess without checking the compulsory one
This is the biggest one. You choose a voluntary excess of £250 thinking you’re sharing the risk, but your compulsory excess for escape of water is already £400. Your total is now £650. A burst pipe that costs £800 to repair means the insurer pays £150 — and you’ve lost your no-claims discount. I’ve seen this catch people out more than anything else. The fix is simple: read the excess schedule for each claim type before you set your voluntary excess, not just the headline premium. If you’re unsure about how your policy handles water damage specifically, our guide on seasonal property insurance risks covers the practical angles.
Making a claim that’s smaller than your total excess
If the repair cost is less than your total excess, you get zero payout. The claim is still recorded, and your no-claims discount may be affected. A £400 claim with a £500 total excess means you pay the full £400 and your premium could rise next year. The rule of thumb: only claim when the damage clearly exceeds your total excess by a meaningful margin. For a £600 claim with a £500 excess, you’d get £100 — which may not be worth the long-term cost.
Assuming buildings and contents excesses are the same
On a combined policy, buildings and contents each have their own excess. If a fire damages both your floorboards (buildings) and your sofa (contents), you may pay two separate excesses. Some insurers use the higher excess for both, but you need to check. The same applies to optional add-ons like accidental damage or personal possessions cover — they can carry their own excess.
Thinking the excess doesn’t apply if you’re not at fault
You always pay your excess when you make a claim, regardless of fault. If the insurer later recovers the costs from a third party — for example, a neighbour’s escaped water that damaged your property — they may refund your excess. But that’s not guaranteed, and it can take months. You still need to cover the excess upfront or have it deducted from the payout.
How to Choose the Right Excess for Your Home
Calculating your total excess before you buy
Your total excess is compulsory plus voluntary. Before you pick a policy, find the compulsory excess for each claim type — theft, escape of water, storm, subsidence, accidental damage. Add your proposed voluntary excess to each. The highest total is the one you need to plan for. If you can’t afford to cover that number in one go, your voluntary excess is too high. Most insurers offer online quote tools that show the compulsory excess clearly under the price, and you can adjust the voluntary excess in steps of £50 or £100. Take the time to run the numbers at different levels before you commit.
Choosing a voluntary excess you can actually afford
A common voluntary excess range is £0 to £400. The most common choice across UK policies is £250, but that doesn’t mean it’s right for you. The key question is: if your roof leaked tomorrow, could you write a cheque for £600 or £700 without stress? If not, keep your voluntary excess lower. The premium saving between £150 and £250 voluntary excess is often under £10 a year — not worth the risk if you’re stretching your finances. On the other hand, if you have a healthy emergency fund, a higher voluntary excess makes sense because the premium savings add up over time without much real risk.
When to claim and when to pay yourself
This is the decision that separates a well-used policy from a regretted one. A general rule: if the damage is less than twice your total excess, it’s probably not worth claiming. The short-term payout is small, and the long-term cost — higher premiums and lost no-claims discount — can exceed the cost of just paying for the repair yourself. For major damage like a fire, subsidence, or a serious flood, the excess is a small fraction of the total cost, so claiming is straightforward. For anything in between, get a repair quote first, then compare it against your total excess and the potential premium increase over the next few years.
What about excess insurance?
Excess insurance is a separate policy that reimburses the excess you pay on a successful claim. It’s most useful if you have a high compulsory excess — for example, £1,000 on subsidence — and you want peace of mind that you won’t be out of pocket if the worst happens. The drawback is the cost of the excess insurance premium, plus exclusions and claim limits. For most people, setting aside the equivalent amount in savings is more cost-effective. But for properties with known high-risk factors, it’s worth comparing the numbers.
If you’re still unsure about how your cover stacks up, speaking to a property lawyer can help clarify policy wording, especially around subsidence and escape of water clauses that often carry specialist excesses.
Frequently Asked Questions About Insurance Excess
Can I change my voluntary excess after I’ve bought the policy? ▾
Does the excess apply to liability claims? ▾
What happens if I can’t afford to pay my excess when a claim is approved? ▾
Does a higher excess always mean lower premiums? ▾
Do I pay excess on a subsidence claim that takes years to fix? ▾
Is there a minimum excess on UK home insurance? ▾
Getting Excess Wrong Can Cost You More Than You Think
UK property insurance payouts are heading towards a record high, with adverse weather claims alone jumping 21% in a year. That means more property owners will be making claims — and more will discover their excess was higher than they expected. The structure of your excess — compulsory plus voluntary, split by claim type, applied to buildings and contents separately — determines whether a claim actually pays out or leaves you out of pocket. The numbers are published, the thresholds are clear, and the decision is yours at renewal. Taking twenty minutes to understand them now is worth more than any premium saving you’ll find by ticking a box and moving on.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Escape the underinsurance trap: calculating your UK home’s true value.
Sources and Further Reading
Beyond buildings: understanding UK contents insurance and why it matters — A practical look at how contents cover interacts with buildings excess and what you need to check on combined policies.
Essential property insurance tips for UK retirement homes — Tailored advice for older homeowners who may be on fixed incomes and need to factor excess affordability into their policy choices.
Utterly Covered (2026). Buildings Insurance Excess UK 2026. 🔗
MyMoneyComparison. Home insurance excess explained. 🔗
Confused.com. What does ‘excess’ mean on home insurance? 🔗
Uswitch. Home insurance excess guide. 🔗
Admiral. Home insurance excess. 🔗
