How car insurance excess works

Insurance excess can be a necessary part of your insurance claim process. It’s important to be aware of when you’re required to pay an excess as part of your policy.  

What is an insurance excess?

Insurance excess is the amount you’ll need to contribute an amount towards the cost of any claims you make. Whether or not you’ll be required to pay an excess depends upon the circumstances behind the incident in question. It’s a good idea to familiarise yourself with your provider’s policies to ensure you’re further aware of the situations when you may be required to pay the excess.

Who pays insurance excess?

In general, if a car accident occurs, the at-fault party will be required to make an excess payment in order to remedy the issues caused. However, sometimes this isn’t the case, such as if you’re unable to provide details or identify the driver who caused damage to your car. Additionally, there are several times when you may need to pay your excess to repair your vehicle, including if:

  • You collide with an animal
  • You’re the person at-fault in an accident
  • Experience the theft or attempted theft of your vehicle
  • Your car receives hail, storm, flood, or fire damage
  • Other incidents outlined by your insurance provider

The above points are simply a guide. For an accurate and comprehensive outline of when your insurance excess will need to be paid, consult with your insurance provider or relevant documents.

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How does insurance excess work?

Car insurance excess is the payment a policyholder will need to make on any claims that are made. For example, say you’re in an at-fault accident with a total cost of $10,000 that you were liable to pay to repair or replace the involved cars. If your policy has an agreed-upon excess of $800 and an excess applies to your claim, we’ll let you know when and how to pay the excess as this will depend on how your claim is settled. For example:

  • If we repair your car, we’ll normally ask you to pay the excess to the repairer before they start the work;
  • In some instances, we’ll ask you to pay your excess to us such as where a repairer or supplier isn’t able to accept an excess payment or your car is a total loss and we replace it with a new one;
  • If we pay you the reasonable cost to repair your car, we’ll deduct the excess from the amount we pay you;
  • If your car is a total loss and we pay you the agreed or market value for your car, we’ll deduct the excess from the amount we pay you.

You can choose how high or low you wish your excess to be; however, this will impact your regular insurance payments. If you choose to have a standard excess, your insurance payments will generally be higher than if you choose to have a higher voluntary excess. It’s worth considering the pros and cons of each option before settling on a decision.

With Australia Post Car Insurance, you can choose the amount of excess you wish to pay for your policy. Our flexible options allow you to select the choice that suits your situation. For more information on key terms surrounding car insurance, read our car insurance glossary.


Australia Post home and motor insurance is issued and underwritten by QBE Insurance (Australia) Limited (ABN 78 003 191 035, AFSL 239545) (QBE). Australian Postal Corporation (ABN 28 864 970 579, AR No: 338646) is an authorised representative of Australia Post Services Pty Limited (ABN 67 002 599 340, AFSL 457551) which is acting (under its own AFSL) on behalf of QBE. Any advice provided is general only and has been prepared without taking into account your objectives, financial situation or needs and may not be right for you. To decide if this product is right for you, please read the relevant Combined Financial Services Guide and Product Disclosure Statement, and Target Market Determination. Any reference to value and competitiveness refers to an average market segment and may not include your specific circumstances.