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Is raising your home insurance excess worth it?
The benefit of adding excesses diminishes the more you add
The cost of home insurance has been falling throughout the past year, but with lots of other bills rising, many of us will be looking for ways to save money on premiums.
Adding voluntary excesses would seem like one of the less complicated ways of lowering home insurance costs. The logic is simple: you agree to the insurer paying out a bit less when you claim, and in return it reduces your premium. The more of the burden you're willing to shoulder, the better the saving.
However, according to new data from price comparison website MoneySuperMarket, the logic of the excess tradeoff isn't always as straightforward as it would at first seem.
Here, we explore how excesses pay off less the more you add. We also show how to choose your optimum excess and other ways of bringing down your price.
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What you get for your excess
This table shows the average savings-to-premium ratio as excesses increase.
By agreeing to pay the first £50 of claims, the average reduction to a buildings insurance quote is £4.67, and the average saving from a contents premium is £3.39. But customers opting to pay 20 times that excess (£1,000) get only around 4-6 times the saving (for contents and buildings cover respectively).
| Voluntary excess amount | Buildings: Average saving vs £0 voluntary excess | Saving vs excess % | Contents: Average saving vs £0 voluntary excess | Saving vs excess (%) |
|---|---|---|---|---|
| £50 | £4.67 | 9% | £3.39 | 7% |
| £100 | £5.67 | 6% | £5.92 | 6% |
| £150 | £8.21 | 5% | £7.40 | 5% |
| £200 | £10.69 | 5% | £10.82 | 5% |
| £250 | £13.80 | 6% | £12.49 | 5% |
| £300 | £15.82 | 5% | £12.14 | 4% |
| £350 | £19.62 | 6% | £12.91 | 4% |
| £400 | £19.08 | 5% | £12.18 | 3% |
| £450 | £20.53 | 5% | £8.93 | 2% |
| £500 | £26 | 5% | £12.74 | 3% |
| £700 | £18.67 | 3% | £10.44 | 1% |
| £1,000 | £27.19 | 3% | £12.50 | 1% |
Data source: Based on Home Insurance enquiries on MoneySuperMarket between 31 December 2025 and 31 March 2026.
'The additional savings tend to diminish'.
According to Kara Gammell, home insurance expert at MoneySuperMarket: 'Adding a voluntary excess can help reduce the cost of home insurance because it lowers the amount an insurer may need to pay out if a claim is made. In return for taking on some of that risk, customers are often offered a cheaper premium.
'Our analysis of quotes run through MoneySuperMarket shows that this benefit isn’t linear. A modest increase to a smaller excess can lead to a relatively larger percentage saving on premiums, but as the excess increases, the additional savings tend to diminish. This is because once an excess reaches a certain point, transferring more risk to the customer makes less difference to an insurer’s overall exposure, which limits how much further the price of your cover can fall.'
Is it worth adding higher excesses?
Increasing the number in the 'excess' column reduces the price, which you'll notice when you buy your cover. However, the excess is a commitment to potentially pay hundreds more in the event of a claim.
So for example, if your total buildings excess was £500, doubling it £1,000 will shave roughly £27 off your premium, according to MoneySupermarket's averages – but this is just a £1 improvement in price (from the average of £26 for a £500 excess) – paling in comparison to the £500 extra you'd need to pay in a claim.
How to choose the right excess
Of course, if you don't claim, then your excess 'bet' has paid off – even if the win was marginal at best. The nature of this risk means your primary consideration when choosing an excess is how much you can afford to pay at short notice. If you'd struggle to 'find' hundreds of pounds at short notice to pay towards repairs on your home, then your excess should be lower.
- Find out more: How to make an insurance claim.
Beware compulsory excesses
Importantly, voluntary excesses don't account for the full amount you'd need to pay. Underneath these are 'compulsory excesses', which apply whether or not you've chosen a higher amount. In a claim, you'll be responsible for the total. Compulsory excesses vary between insurers and types of claim and should be detailed in your quote.
When we last surveyed insurers in June-July 2025, compulsory excesses for most kinds of buildings and contents claim were typically around £100. For other kinds of claim, such as escape of water, averages were closer to £400.
How else to save money
While adding excesses are one way of lowering your premium, they're far from the only cost-saving tool in your toolkit.
Shopping around early can potentially shave hundreds off the premiums insurers offer you, as premiums generally tend to rise the closer you are to the date the cover begins.
Shopping around also gives you a sense of how reasonable one insurer's price actually is compared to its rivals. If you're prepared to switch to a provider with a better offer, or to negotiate your price with your existing insurer, it could be that you can get that £20 or £30 price reduction without gambling with the chance of paying hundreds more further down the line.
- Find out more: Check our guide on finding cheap home insurance for more ways to save.
