Car insurance excess is simply the amount you agree to pay out of your own pocket when you make a claim. Think of it as your share of the bill: if repairs cost $3,000 and your excess is $600, you pay $600 and your insurer covers the remaining $2,400 (subject to your policy). The excess you choose can also affect your premium — higher excess usually means a cheaper premium — and extra excesses can apply in certain situations, such as when an unlisted or young driver is involved.
This plain‑English guide explains how excess works in Australia: excess vs premium, the different types you’ll see, when you do and don’t have to pay, and how insurers collect it. We’ll cover stacked excesses, real‑world cost examples, choosing the right excess for your budget, and special cases like windscreens, weather, theft and animal strikes. You’ll also learn what to check in your PDS, options for waivers or hardship, and how National Cover handles excess fairly. First up, the difference between excess and premium.
Excess vs premium: what’s the difference?
Your premium is what you pay to keep your policy active (usually monthly or yearly). Your excess is what you pay if you make a covered claim. They work in opposite directions: choose a higher excess and you’ll generally get a lower premium; choose a lower excess and you’ll usually pay a higher premium. Put simply, premium is the ongoing cost of cover; excess is your share of a claim. If repair costs are less than your excess, there’s no payout.
- Premium: Ongoing cost to be insured, payable whether or not you claim.
- Excess: Per‑claim contribution, payable or deducted when you claim (
your cost = all applicable excesses).
Types of car insurance excess in Australia
When you see car insurance excess explained in Australia, insurers usually group it by how the amount applies to your claim. Your policy schedule will show each excess that could apply. Here are the main types you’ll come across.
- Basic (standard) excess: The default amount you pay on most claims. It’s set out in your policy and applies per incident.
- Voluntary excess: An amount you choose to add on top of the basic excess to reduce your premium; lowering it generally increases your premium. Common on comprehensive policies.
- Windscreen/window-glass excess: A separate excess for glass claims. Many insurers offer a reduced or excess‑free option for an extra premium.
- Policy‑type excess rules: With comprehensive cover you can often adjust your excess; with some Third Party Property policies the excess is fixed and not adjustable.
- Additional excesses: Extra amounts that can stack based on circumstances (e.g., driver factors). We cover these next.
Additional excesses you might see (age, inexperienced, unlisted and more)
Beyond your basic (and any voluntary) excess, many Australian policies include extra amounts that can apply based on who was driving and the terms of your cover. These additional excesses are listed on your policy schedule and, depending on the circumstances, can be added to your basic excess for a single claim.
- Age excess: An extra amount if the driver is under a set age (often under 25).
- Inexperienced driver excess: Applies when the driver hasn’t held a full licence for a specified period.
- Unlisted driver excess: Charged if the person at the wheel isn’t named on your policy.
- Kilometre‑limit excess: Can apply if you breach a low‑kilometre policy’s annual limit.
- Special terms excess: Some policies specify extra excesses for particular driver or vehicle risk profiles.
Tip: the at‑fault 19‑year‑old friend who isn’t listed can trigger multiple extras at once (e.g., age + unlisted) on top of your basic excess.
When you do and don’t pay an excess
Here’s the car insurance excess explained in practical terms: you’ll generally pay an excess for each incident you claim, unless your insurer determines you weren’t at fault and you can identify the responsible driver. If you can’t reasonably identify them, the excess usually applies.
- You typically pay an excess when: you’re at fault (or partly at fault); you can’t identify the at‑fault driver; damage is from weather (hail, storm, flood, bushfire); theft, vandalism or malicious damage; animal collisions (e.g., kangaroo); or for windscreen/glass unless you’ve added a reduced or excess‑free glass option.
- You often don’t pay an excess when: it’s a no‑fault accident and you provide the other driver’s full name, address and vehicle registration so your insurer can recover costs.
If repair costs are below your excess, there’s no payout and most people skip the claim.
How and when the excess is collected on a claim
When you make a claim, your insurer will confirm when and how your excess is paid. It’s charged per incident and any additional excesses that apply are added together and collected as one amount. In practice, you’ll usually either pay it upfront for repairs or have it deducted from a total‑loss payout.
- Repairable claims: Excess is typically paid before repairs start (your insurer will advise the process).
- Write‑offs (total loss): The insurer usually deducts your excess from the final settlement.
- New car replacement: Excess is generally paid before the replacement is arranged.
- No‑fault with full at‑fault details: Excess is often waived, so nothing is collected.
- Financial hardship: Many insurers may allow instalments or a short deferral on request.
Can excesses stack? How multiple excesses can apply
Yes, excesses can stack. For one incident you pay a single total made up of your basic/standard excess (including any voluntary amount) plus any additional excesses triggered by the driver or policy terms. Your schedule lists the amounts. For glass‑only claims a separate windscreen/window‑glass excess often applies. In a verified no‑fault accident with full at‑fault details, stacking generally doesn’t apply.
- At‑fault 22‑year‑old listed: basic + age excess.
- At‑fault 22‑year‑old unlisted: basic + age + unlisted.
- Listed P‑plater (<2 years’ licence): basic + inexperienced.
- Low‑kilometre policy exceeded: basic + kilometre‑limit.
- Theft or hail: basic only (per policy).
The insurer collects any stacked excesses as one payment.
Examples of how an excess changes your out-of-pocket costs
Seeing the maths on a few common scenarios makes car insurance excess explained simple. As a rule, Out‑of‑pocket = sum of applicable excesses (capped at the claim amount).
- At‑fault repair costs $2,600; basic excess $700: you pay $700, insurer $1,900.
- Minor scratch $350; basic excess $600: you’d pay $350 and usually skip claiming.
- Under‑21 driver at fault; basic $600 + age $600; $5,000 damage: you pay $1,200, insurer $3,800.
- No‑fault with full at‑fault details provided: excess waived, you pay $0.
- Windscreen: with excess‑free glass option pay $0; otherwise pay your glass excess.
- Total loss settlement $20,000; total excesses $900 deducted; insurer pays $19,100.
Choosing your excess: finding the right level for your budget
Picking an excess is a trade‑off between lower premiums now and higher out‑of‑pocket if you claim. A practical rule: if you couldn’t comfortably pay the excess tomorrow, it’s too high. Your driving risk and who uses the car matter too, because additional excesses can apply for young, inexperienced or unlisted drivers, which can stack on top of your basic amount.
- Budget comfort: Choose the highest excess you can pay in a pinch without stress.
- Value test: Use
Premium saving > (Extra excess × your estimated chance of a claim)as a quick sense‑check. - Driver mix: Regular young/inexperienced drivers? Consider a lower basic excess to offset likely add‑ons.
- Risk profile: Heavy commuting, high‑traffic or storm‑prone areas may justify a lower excess.
- Policy type: Comprehensive often lets you adjust excess; some Third Party Property policies don’t.
Revisit your excess when your circumstances change (new drivers, new commute, new address).
Windscreen and glass claims: reduced or zero excess options
Glass is often treated differently. Many comprehensive policies have a separate windscreen/window‑glass excess, which might equal your basic excess or be a specified glass amount. Without a glass add‑on you’ll generally pay that excess on a glass‑only claim. With optional cover, you can reduce it to a low figure or even $0 (often by paying a small extra premium). Third Party Property policies typically don’t let you adjust glass excess.
- What’s covered: Windscreen only or all window‑glass.
- Repairs vs replacements: Some options waive excess on repairs; others include replacements.
- How it’s paid: Usually upfront to the approved glass repairer/insurer before work starts.
Weather, theft and animal collisions: what to expect
Even when you’re not to blame, these events almost always attract an excess. Insurers in Australia generally treat weather, theft and animal strikes as claimable incidents where a no‑fault waiver doesn’t apply. Expect to pay at least your basic/standard excess; additional driver excesses may apply for animal collisions depending on who was driving and your policy.
- Weather (hail, storm, flood, bushfire): Excess applies, typically your basic excess.
- Theft or vandalism: Excess applies; commonly basic excess only.
- Animal collisions (e.g., kangaroo): Excess applies; age/unlisted/inexperienced driver excesses can stack if triggered.
Third party property vs comprehensive: excess differences
Here’s the car insurance excess explained at policy level. With Comprehensive, you usually pay an excess when claiming for damage to your own car (and damage you cause to others), and you can often choose a higher or lower basic/voluntary excess to influence your premium. With Third Party Property Damage (TPPD), your excess typically applies when you damage someone else’s property; some insurers don’t let you adjust this excess. Age, inexperienced or unlisted‑driver excesses can still apply on either policy. Weather, theft and glass on your own car aren’t claimable under TPPD, so no excess applies there.
- Adjustability: Comprehensive often adjustable; TPPD is frequently fixed by the insurer.
- What triggers it: Comprehensive covers many incidents; TPPD applies when you damage others.
- No‑fault waivers: Many insurers waive excess if you’re not at fault and provide full at‑fault details.
- Stacking: Additional driver excesses can apply on both, depending on policy terms.
Rideshare, taxi and business use: excess rules to know
If you use your car for rideshare, taxi or business activities, expect excess rules to differ from private use. Policies can include special terms for commercial use, and the usual additional excesses (age, inexperienced, unlisted driver) can still apply and stack. No‑fault principles remain similar: if another driver is entirely at fault and you can identify them, many insurers will waive your excess; for weather, theft and animal claims, an excess generally applies. Consider this your car insurance excess explained for work use.
- Correct use on your policy: Excesses and conditions can vary for commercial vs private use, so ensure your policy reflects how the vehicle is used.
- Driver listing matters: Unlisted driver excesses can apply; list regular and business drivers to avoid extra costs.
- High‑kilometre triggers: Some policies include a kilometre‑limit excess if you exceed a selected cap — common for low‑km products.
- Stacking still applies: A young or inexperienced rideshare/taxi driver can trigger additional excesses on top of the basic amount.
- No‑fault claims: Provide the at‑fault driver’s full name, address and rego to help your insurer waive the excess where applicable.
Ways to reduce or avoid paying an excess (legitimately)
You can’t wish an excess away, but there are smart, legitimate ways to pay less — or nothing — when you claim. Here’s car insurance excess explained in practical steps that either prevent additional excesses from triggering or help you qualify for an excess waiver.
- Prove no‑fault and identify the at‑fault driver: Provide their full name, address and rego to help your insurer waive the excess.
- Add optional glass cover: Many policies offer reduced or $0 windscreen/window‑glass excess for an extra premium.
- List all regular drivers: Avoid the unlisted‑driver excess by naming everyone who uses the car.
- Mind age/experience risks: Limiting use by under‑25 or inexperienced drivers avoids extra excesses.
- Stay within km caps (if applicable): Low‑kilometre policies can add an excess if you exceed the limit.
- Use preferred repairers: Some providers (including National Cover) offer a discount on excess when you do.
- Collect evidence: Dash cam footage, witness details and photos help establish no‑fault and support waivers.
- Skip small claims: If repairs are near or below your excess, paying privately avoids the excess and a claim on record.
Excess refunds, waivers and hardship instalments
In short, car insurance excess is explained by how your insurer treats fault and affordability at claim time. If you’re not at fault and can identify the responsible driver, many insurers will waive the excess upfront. If details aren’t available, you’ll usually pay now; for theft, weather and animal claims, an excess typically applies. If you’re in financial hardship, insurers may offer instalments or short deferrals.
- Waivers: Excess is often waived for verified no‑fault accidents when you provide the at‑fault driver’s full name, address and rego.
- Refunds: If you paid an excess and your insurer later recovers costs from the at‑fault party, they may refund it; timing varies.
- Hardship: Ask about instalments, deferrals or alternative arrangements if you can’t pay a lump sum.
- Proof matters: Police reports, dash cam footage and witness details help secure waivers or recovery.
What to check in your PDS about excess
Your Product Disclosure Statement is the rulebook for how your excess really works. Before you choose an excess or make a claim, scan the PDS and policy schedule to confirm amounts, when an excess applies, when it can be waived, and how multiple excesses can stack. A quick review here prevents bill‑shock later and keeps your car insurance excess explained in plain terms.
- Excess types and amounts: Basic/standard plus any additional excesses (age, inexperienced, unlisted, kilometre‑limit).
- Adjustability: Whether you can change the basic/voluntary excess (often on Comprehensive; often fixed on Third Party Property).
- No‑fault waiver criteria: Proof required to waive excess (typically the other driver’s full name, address and rego).
- Event rules: If excess applies for weather, theft, vandalism and animal collisions.
- Glass terms: Separate windscreen/window‑glass excess and any reduced/$0 glass options.
- Stacking rules: When multiple excesses can apply to a single incident.
- Payment timing: Paid before repairs, or deducted from total‑loss/new‑car replacement settlements.
- Use and drivers: Rideshare/taxi/business use conditions and driver‑listing requirements.
- Repairer choice: Any excess discounts when using preferred/approved repairers.
- Hardship options: Instalments or deferrals if you can’t pay a lump sum.
How National Cover handles excess on our policies
We keep your car insurance excess simple and upfront. Your policy schedule shows every excess, and when you claim we confirm the total before repairs start or deduct it from a total‑loss payout. Where your policy allows and a no‑fault accident is verified with full at‑fault details, we’ll seek to waive the basic excess.
- Excess discount: Pay less excess when you use our preferred repairers.
- Replacement car: Provided on verified not‑at‑fault claims.
- Lifetime warranty: On all authorised repairs.
- 24×7 towing: After insured incidents.
- Easy claims: Fast email lodgement with expert guidance.
- Work use ready: Rideshare, taxi and business support, including help listing drivers to minimise additional excesses.
The bottom line on car insurance excess
Your excess is your share of a claim and a lever you can use to control your premium. Choose a level you can afford tomorrow, know when excesses apply (at‑fault, weather, theft, animal, most glass), and when they’re often waived (verified no‑fault with full details). Keep an eye on additional excesses that can stack, and make sure your drivers and usage are correctly listed. The surest way to avoid bill‑shock is simple: read your PDS, confirm your amounts, and set an excess that matches your risk and budget.
If you want sharp pricing, maximum cover and expert claims help, we’re ready to assist. Get started with National Cover today at National Cover and put a smarter excess to work for your wallet.
