How This Tool Works
📋 Purpose
This tool uses real UK average premium data from the Association of British Insurers (ABI) and claim frequency data from the FCA to calculate the true cost of each excess option — so you can make an informed decision at renewal time instead of guessing.
⚙️ How It Works
- 1Enter your postcode to look up your regional average home insurance premium
- 2Select your insurance type — combined, buildings only, or contents only
- 3Enter your monthly savings so we can check affordability of each excess level
- 4Optionally enter your actual renewal premium for a more precise comparison
- 5The tool calculates discounted premiums for six voluntary excess levels (£0 to £1,000)
- 6Review the comparison including net benefit, break-even years, and affordability rating
Your Details
Enter your postcode, insurance type, and savings to get a personalised excess recommendation.
Used to look up your regional average premium
How much you could comfortably pay towards a claim at short notice
Compare costs over a longer period to see the full saving
If you have a quote, enter the premium for the lowest (£0 voluntary) excess. We will calculate discounted premiums for higher excess levels.
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Insurance Excess Calculator — Complete Guide
Understand how voluntary excess affects your home insurance premium and work out which excess level gives you the best balance between savings and manageable risk.
📅 Last updated: 2026-04-14
Quick Tips
Jump-start your understanding with these essential tips
A higher excess reduces your premium, but you must be able to pay it at short notice if you claim. If you would need to borrow to cover a £500 excess, the interest could wipe out your premium saving.
The break-even figure tells you how many claim-free years it takes for the premium saving to repay the higher excess. If break-even is under two years, the higher excess is usually worthwhile.
Enter your real premium in the optional field for the most accurate comparison. If you don't have a quote, we use the ABI regional average for your postcode.
FCA data shows around 8% of contents policies and 4% of buildings policies result in a claim each year. This affects which excess level is optimal for each cover type.
Premiums change each year. What was the best excess last year may not be the best choice when your premium changes at renewal. Always re-check.
Step-by-Step Guide
Follow these steps to get the most from this tool
Your postcode tells us which region you are in so we can use the correct average premium. Select whether you have combined (buildings and contents), buildings only, or contents only cover. Different cover types have different claim rates and average costs.
💡 Pro Tips:
- •London postcodes have the highest average premiums.
- •Combined cover gives a single premium that is usually cheaper than two separate policies.
Tell us how much you could comfortably pay at short notice — this determines which excess levels are affordable for you. If you have a real renewal quote, enter it in the optional premium field. Otherwise we use the ABI regional average as a baseline.
💡 Pro Tips:
- •Include any emergency fund or accessible savings.
- •Don't include money you cannot access quickly, like pension savings.
The comparison table shows every excess level from £0 to £1,000 voluntary, including the compulsory excess set by the insurer. For each level you can see the estimated premium, saving, expected claim cost, net benefit, break-even point, and affordability rating. The tool highlights the recommended option in green.
💡 Pro Tips:
- •Look at the Net Benefit column — this combines premium saving with expected claim cost.
- •The affordability badge shows whether you could comfortably cover the excess if you had to claim.
Switch the planning horizon to 3 or 5 years to see how savings accumulate over time. A small annual saving can add up significantly. Export your comparison as a CSV or JSON file to share with your household or keep for renewal time. You can also use the UK Budget Income Planner to check how the excess fits into your overall budget.
💡 Pro Tips:
- •Export one scenario at your current excess and one at the recommended excess to compare.
- •Re-run at renewal time when you have updated premium quotes.
Advanced Topics
Deep dives for advanced users
Expected annual cost combines what you definitely pay (the premium) with what you might pay (the excess, weighted by claim probability). The formula is: expected cost = annual premium + (total excess × claim probability). A £500 total excess with a 6% claim chance adds £30 to your expected annual cost. If that £500 excess saves you £60 on premium, your net benefit is £30 per year.
The mathematically cheapest excess is often the highest one — but only if you can actually pay it. If a claim happens and you cannot pay the excess, the insurer may refuse to settle the claim. This creates a gap in your cover that is worse than paying a slightly higher premium. The tool checks whether the excess is within reach of your savings before recommending it.
Home insurance premiums vary significantly by region. ABI data shows London averages around £521 per year for combined cover, while the North East averages around £315. This difference is driven by property values, crime rates, subsidence risk, and local flood exposure. Use the Flood Risk & Insurance Cost Checker to understand how flood risk specifically affects premiums in your area.
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