Price long-tail
Insurance excess explained (Australia)
Direct answer
Does a higher excess lower my insurance premium?
An excess is the first part of an insured loss you agree to keep. A higher voluntary excess often lowers the premium because the issuer keeps less of that first loss — not always, and never by a figure we will invent. Age, inexperienced, event and standard excesses can add on the same claim. Fund the stack before you treat a cheaper invoice as kindness. This is general information, not a priced table.
Premiums move. This page explains how price is formed — it is not a live market or a quote.
Check dated sources: ASIC MoneySmart — Insurance · ASIC MoneySmart — Car insurance · Australian Financial Complaints Authority
- Excess
- First loss you keep
- Stack
- Standard + voluntary + age + event
- Premium
- Often moves, never by a number we invent
- Test
- Can you fund the stack in five days?
What moves the price
What commonly moves an Australian insurance premium — qualitative only. No invented dollars.
| Factor | How it usually moves price | Where to check |
|---|---|---|
| Voluntary excess | A higher figure you choose often lowers the premium because you keep more of the first loss. It can also make a small claim not worth making. | Quote configurator and schedule |
| Standard or basic excess | The starting amount before you add a voluntary extra. Some products let you buy it down; some do not. | PDS excess section |
| Age and inexperienced excesses | Extra amounts that can stack when a young or newly licensed person is driving. They change claim-day cash even if the tile showed one number. | PDS plus the listed-driver answers |
| Event or item excesses | Glass, theft, earthquake, flood or specified items can carry their own amounts. | PDS table of excesses |
| Fundability | A cheap premium attached to a stack you cannot pay is an unfunded bet, not a saving. | Your cash buffer, not the comparison tile |
| Other rows moving at the same time | If layer, extras or sums moved with the excess, you do not have an excess experiment. | The two schedules side by side |
What an excess is — and what it is not
An excess is the first part of an insured loss you agree to keep. Depending on the wording, you pay it to the repairer or insurer, or it is deducted from a settlement. It is not a fee for having a policy. It is not a waiting period. It is not a premium.
People search insurance excess explained Australia and does higher excess lower car insurance premium because a slider on a quote form moves the monthly figure. The honest sentence is: a higher voluntary excess often lowers the premium because you keep more of the first loss. It does not always move. We will not invent how far it moves.
The deeper companion is excess versus premium. This page is the price-spoke version: stacks, experiments, and the cash test. MoneySmart is the consumer-language home. The disclaimer is the legal restatement.
Stacks are the part tiles hide
Many Australian general-insurance products use more than one excess on the same claim.
- Standard or basic.
- Voluntary extra you chose to move the premium.
- Age or inexperienced-driver amounts on motor.
- Event or item amounts — glass, theft, flood, earthquake, specified valuables.
The claim-day cash is the stack that can apply to the event you named. A quote tile that shows one number is a marketing convenience.
If a young or newly licensed person regularly drives, read the age and inexperienced paragraphs before you treat a low comprehensive premium as kindness. Continue at car insurance under 25 and car insurance cost.
If the event is glass-only, a separate glass excess can make a “cheap comprehensive” expensive on the day the stone hits.
The only excess experiment we will describe
Two quotes. Same person, same object, same layer, same extras, same sums. Only the voluntary excess moves.
Fill the two invoices from quotes you were given. We will not invent the gap.
If the issuer is already at a maximum voluntary excess, a further tick may do nothing. If an extra disappeared when the slider moved, you no longer have an excess experiment. If the layer changed — comprehensive to third party — you have a product change. Read comprehensive vs third party cost difference.
That experiment is a legal lever on how to lower premiums. Omitting a driver to make the slider look clever is not.
The five-day cash test
Before you call a higher excess a saving, ask whether you can access the stacked total within about five days of the event you actually fear — not the event on a brochure.
- Motor: at-fault smash with the listed young driver, plus any inexperienced amount.
- Home: roof and temporary accommodation after a named storm event, plus any event excess.
- Contents: the items you would actually claim, versus an excess that sits near their value.
- Health: admission excess plus any gap fees the fund does not pay.
If the answer is no, the cheap month is an unfunded bet. You may still choose it. Write that sentence down so renewal-you remembers.
A high excess can also make small claims uneconomic. That can be rational for a household that will never claim a windscreen. It is a product choice, not a hidden discount.
Excess is not a waiting period
Health, pet and income-protection products often use time as a deductible. A longer wait can make the monthly figure look kinder and leave you unpaid if the event arrives in week two. That row belongs on waiting periods, not on this excess sheet.
A hospital product can have both: a wait before a procedure is eligible, and an excess when you are admitted. Line both up. A cheaper fund that lengthened the wait is not an excess win.
Not-at-fault is still an excess conversation
On motor, some wordings apply an excess even when you were not at fault, then refund it if they recover from the other party. Some waive it when the other driver is identified and insured. Some still apply it if you use your own comprehensive to repair first.
Ask the quote in front of you. Forum folklore is not a PDS. The answer changes whether a low voluntary excess is “free” on a not-at-fault week.
Third-party-only products may never talk about repairing your own car. Raising or lowering an excess on TPPD does not buy own-damage cover.
Home, contents and health — same word, different cash
Home. Event excesses and a rebuild figure interact. A higher excess on an underinsured rebuild is two thinnings at once. See underinsurance.
Contents. If the excess sits near the value of the laptop you would claim, you have a policy for a house fire and not for the café bag. That can be intentional.
Landlord. Loss-of-rent calculations and tenant-damage excesses are easy to miss on a leftover home brochure. Shop a landlord wording.
Health. Per-admission excess, plus extras limits, plus waits. Do not rank monthly figures until those three rows match.
The habit is the same: name the event, write every amount that can apply, fund it, then rank.
What we will not print
We will not publish a typical saving for “raising your excess by a certain amount”. We will not name a safest excess. We will not say young drivers “always” pay an extra amount without pointing you at the PDS in front of you. We will not treat Compare offers as a live slider.
If a paragraph on this domain ever sounds like a priced excess rule of thumb, treat it as a bug and tell us. The methodology is why those figures are missing.
How to use this page on a quote sitting
- Name the event.
- Search the PDS for every excess heading.
- Add the amounts that can apply together.
- Run the five-day cash test.
- Ask for a second quote that differs only by voluntary excess.
- Confirm extras and layer did not move.
- Rank only those two invoices.
- If you cannot fund the stack, do not call the cheaper month a saving.
The quotes checklist is the sheet. How to compare is the method. Excess is a lever. It is not the product.
Worked (hypothetical) excess sitting — no live prices
Path A: comprehensive car, both regular drivers listed, voluntary excess at the figure already on the schedule, hire-car extra on.
Path B: same people, same layer, same extra, only the voluntary excess moved up, and the household can access the stacked total — including any inexperienced amount — within five days.
Path C: same as B, except the hire-car extra turned off when the slider moved, and a newly licensed person is missing from the form.
Path B is the only excess experiment this page will describe. Fill A and B from quotes you receive. We will not invent the gap. Path C is a broken experiment plus a duty problem.
A home version: two quotes that differ only by voluntary excess, with the same rebuild method and the same flood wording. If the cheaper quote also lowered the rebuild figure, you have two thinnings. See underinsurance.
A health version: two hospital products with the same clinical table. One has a larger admission excess. If the cheaper month also lengthened a wait, you have a time deductible and a money deductible. Line both up.
When a higher excess does nothing
Issuers cap voluntary excesses. If you already sit at the cap, another tick may leave the premium where it is. Ask. Do not assume the slider is infinite.
Some products refuse to lower the premium until the excess jumps a band. Two nearby figures can produce the same invoice. The honest test is still two quotes, not a folklore step-size.
Some products pair a higher excess with a different extra or a different flood option in the configurator. If more than one field moved, write “broken” and run the sitting again.
A higher excess also does nothing useful if you will never fund it. The claim that is declined in practice because you cannot pay the stack is not a cheaper policy. It is an unpaid first loss you already agreed to keep.
Small claims, glass and the policy you will never use
A high excess can make a windscreen, a minor contents theft, or a small landlord mark uneconomic. That can be rational. Write the event you are actually buying: house fire, write-off, hospital admission — not the café bag.
Glass-only motor claims often have their own excess. Raising the voluntary smash excess does not automatically change the glass amount. Read both headings.
Specified valuables on contents can carry their own excess or their own sub-limit. A cheaper monthly figure that raised the general excess and left a ring unspecified is two different rows.
Excess, duty and the cheap quote that omitted a person
Raising an excess is legal. Omitting a young driver so the stack looks smaller is not a lowering method. The stack that matters is the stack that applies when the person who actually drives is at fault. List them. Then read the age and inexperienced paragraphs. Then decide the voluntary figure.
The same sentence applies to occupancy, business use and medical answers. Excess does not wash a misrepresentation.
A printable excess sheet
| Row | Quote A | Quote B |
|---|---|---|
| Event named | ||
| Layer / product | ||
| Standard or basic excess | ||
| Voluntary excess | ||
| Age / inexperienced / event amounts that can add | ||
| Stacked total you must fund | ||
| Extras still ticked? | ||
| Waits (if any) unchanged? | ||
| Five-day cash test passed? | ||
| Premium you were quoted | last | last |
If the stacked totals differ and everything else matches, you have an excess comparison. If anything else moved, you do not.
Official education: MoneySmart. Motor companion: MoneySmart car insurance. Disputes: AFCA.
Return to the sheet at renewal. A letter that jumped because repair costs moved is not automatically a reason to raise the excess. Run the cash test again. Use how to lower premiums legally if you still want one lever. Use the disclaimer as the legal restatement: general information, stack first, invoice last.
How excess shows up on a claim file
Ask how you pay. Some wordings deduct the excess from a settlement. Some ask you to pay a repairer. Some apply it only after they accept the claim. Those mechanics change cash-flow even when the number on the schedule looks the same.
Ask whether the excess is per event or per claim section. A storm that damages a roof and a fence can be one event or more than one, depending on the wording. A car smash plus a windscreen can be two excesses.
Ask what happens if the claim is withdrawn or declined after you paid. Refund rules sit in the PDS, not in a call-centre slogan.
None of those answers is a reason to invent a brand ranking. They are reasons to put “how we pay the excess” on the like-for-like sheet beside the stacked total. A cheaper premium attached to a messier payment mechanic is still a product difference.
If you switch after raising an excess and then claim in the overlap week, tell both issuers. Dual insurance is coordination. Excess amounts may still apply on the policy that actually pays. Overlap is about gaps, not about avoiding a first-loss twice.
Keep the schedule that shows the stack you agreed. Chat-window screenshots age badly. The printed excess table is the row a claims officer will read.
Price mechanic
Excess versus premium
A lower premium is often the insurer handing you a larger first-loss. That is rational only if you can fund every stacked excess in cash. Align the excess rows, then compare the premiums you were actually quoted — never a banner number from another year.
- Write the standard, voluntary, age, inexperienced and event excesses for each quote.
- Ask whether more than one can apply on the same claim.
- If you cannot fund the stack, the “saving” is not a saving.
How to read a renewal letter
1. Separate book-level from your-level
A renewal can move because repair, rebuild or medical costs moved for the whole book — or because a factor on your schedule changed. Ask which list they will give you.
2. Re-read the object and the people
Address, vehicle, listed drivers, occupancy, rebuild estimate and extras drift. A silent change is a new product wearing last year’s name.
3. Do not switch into a gap
If you shop, overlap by a day. A cancelled policy plus a delayed start is how households become uninsured for a week.
Worked comparison
A like-for-like experiment (no live prices)
Two quotes for the same person, the same object, and the same event. Only one row is allowed to move. We will not invent the invoices — you fill those from quotes you actually received.
Quote A — thicker promise
- Named event is in the “we will pay” chapter
- Excess stack written in full
- Sum insured or benefit period you can defend
- Extras you would actually use
Quote B — thinner invoice
- Same event? If not, stop ranking
- Higher or extra excess you may not fund
- Lower sum, shorter wait, or a missing extra
- Looks cheaper because the promise shrank
If you cannot say which single row changed, you do not have a price comparison. You have two products.
Like-for-like worksheet
Copy this into a notes app. Leave the premium cell empty until every other cell matches across quotes.
| Row | What to write | Quote A | Quote B |
|---|---|---|---|
| Event named | Storm, smash, hospital, vet, rent stop — one sentence | — | — |
| Cover layer | Comprehensive vs TPPD; hospital vs extras; accident vs illness | — | — |
| Listed people / use | Drivers, tenants, occupation, destination | — | — |
| Excess stack | Standard + voluntary + age + event | — | — |
| Limits / valuation | Rebuild, agreed vs market, annual cap, benefit period | — | — |
| Waits & exclusions | Pre-existing, flood, sports, “we will not pay” | — | — |
| Extras ticked | Windscreen, hire car, portable, flood option | — | — |
| Premium you were quoted | Last column — only after the rows above match | — | — |
Like-for-like quote checklist
Tick these before you rank invoices. A missing tick means you are comparing different products.
1.Two quotes that differ only by excess
If anything else moved, you are ranking two products.
2.Every excess that can apply on the event you named
The tile is not the stack.
3.A five-day cash test for the stacked total
Unfunded excesses turn cheap months into unpayable claims.
4.Same layer, people, use and extras
Excess is one lever. Do not hide a thinner promise inside it.
5.Not-at-fault rules read for motor
You may still pay first.
6.Waits listed on a different row
Time deductibles are not excesses.
Where price hides in the PDS
Search the PDF for “we will not”, “limit”, “excess”, “waiting” and the name of the extra you ticked.
One number on the tile
Age, inexperienced, glass and event excesses can still apply. Search the PDS for every “excess” heading before you treat the invoice as kindness.
Excess raised and an extra silently dropped
Some configurators change more than one field. If hire car or portable cover disappeared, the comparison is broken.
Small claims you will never make
A high excess can make a windscreen or a minor contents claim uneconomic. That can be rational. Write it down as a product choice.
Health excess confused with a waiting period
A hospital excess is money at admission. A wait is time. A cheaper fund can hide a longer wait instead of a higher excess. Line both up.
Educational scenarios — not quotes
These cards name a situation and the comparison rows it changes. They do not invent a typical premium.
Scenario
Comprehensive car, young listed driver
Parents raising a voluntary excess to offset a renewal after a P-plater was added.
Ask which age or inexperienced amounts still stack if that driver is at fault. The voluntary tick is not the whole first-loss.
Scenario
Home in a storm suburb
A household considering a higher excess because rebuild costs moved the premium.
Confirm you can fund the stack after a roof event, including any event excess. Then run two quotes that differ only by that figure.
Scenario
Hospital product with an admission excess
A cheaper monthly hospital product with a larger excess per admission.
Line the clinical table and the waiting table up first. Then decide whether you can fund the admission excess. See the health cost spoke.
Scenario
Contents in a share apartment
A renter raising excess to cut a monthly figure on a modest inventory.
If the excess sits near the value of the items you would actually claim, you have bought a policy you will never use. That can still be a choice — write it down.
Price myths we will not print as facts
Not a method
“The cheapest quote is the cheapest insurance.”
A lower invoice often means a thinner promise, a higher excess stack, or a waiting period that would decline the event you named.
Not a method
“A comparison tile is already like-for-like.”
Tiles freeze a few fields. Excess stacks, extras, flood, and listed people live in the PDS and schedule.
Not a method
“If I did not claim, the renewal cannot rise.”
Book-level costs, rebuild or repair inflation, and a factor on your schedule can move the price without a claim from you.
Not a method
“Bundling always saves money.”
A multi-policy discount can hide a weaker wording. Compare each product as if the discount did not exist.
Questions to take to an issuer
Ask these in writing. A shrug is a reason to keep shopping the document, not the tile.
1.Which event on my one-line brief does this product actually pay?
If the issuer cannot point to a PDS chapter, you are shopping a brand, not cover.
2.Which excesses can apply on the same claim, and can I fund the stack?
The large number on the quote form is rarely the whole first-loss.
3.What is excluded under a different name — flood vs storm, illness vs accident, own vs any occupation?
Definitions, not brochure adjectives, decide the payout.
4.What waiting period starts if I buy this week and the event happens next month?
A cheaper start date can be an unpaid month.
5.If I cancel mid-term or switch, when does the old cover end and the new cover start?
A gap is more expensive than a day of overlap.
6.What would a misrepresentation on this application do to a later claim?
A cheap quote that depends on a guessed answer is not a comparison win.
Price questions Australians ask
Frequently asked questions
What is an insurance excess in Australia?
It is the amount you agree to pay towards an insured claim, or that is deducted from a settlement, depending on the wording. Read the PDS excess section. The large number on a quote tile is rarely the whole story if age or event excesses can add.
Does a higher excess always lower the premium?
Often, not always. If you already sit at the issuer’s maximum voluntary excess, another tick may do nothing. Some products pair a higher excess with a dropped extra. Ask for two quotes that differ only by excess.
What is an excess stack?
More than one excess applying to the same claim — for example a standard or voluntary amount plus an age or inexperienced-driver excess, or a separate glass excess. The claim-day cash is the total that can apply, not the tile.
Is choosing a higher excess a legal way to lower premiums?
Yes, if you can fund the stack and you did not change people, use, layer or sums to manufacture the price. See how to lower premiums legally. Misrepresentation is not an excess strategy.
Do I pay an excess if I am not at fault?
Sometimes. Some motor wordings still apply an excess and later refund it if they recover. Some do not. The answer sits in the PDS, not in a forum thread.
Is excess the same as a waiting period?
No. Excess is usually money at claim time. A waiting period is time before a benefit can start. Health, pet and income protection use time as a deductible. Do not mix the two rows on a comparison sheet.
Sources and further reading
Related price long-tails
Car
How much does car insurance cost in Australia?
How comprehensive and third-party prices are formed — no invented averages.
Process
How to lower insurance premiums legally
Levers that change price without inventing a saving percentage.
Car micro
Comprehensive vs third party cost difference
Why a cheaper third-party tile is a different product, not a discount.
Keep reading
Excess vs premium
Why a lower premium can cost more at claim time — and how excess types stack.
Comparing quotes checklist
Questions to ask before you buy or switch, written as a reusable worksheet.
Waiting periods explained
Where waiting periods show up (health, pet, income, travel) and why they exist.
How to compare insurance prices
Cover first, price second — a repeatable comparison method.
Methodology
How we write comparisons without invented rankings.
After you finish this page
- 1. Write the event in one sentence.
- 2. Fill the like-for-like worksheet from two real quotes — not from this website.
- 3. Read the PDS chapters you ticked as risks.
- 4. Only then rank the premiums you were given.
Premiums move. This page explains how price is formed — it is not a live market or a quote.
Check dated sources: ASIC MoneySmart — Insurance · ASIC MoneySmart — Car insurance · Australian Financial Complaints Authority