Is Raising Your Home Insurance Excess Worth It?
New data from MoneySuperMarket shows that increasing your voluntary home insurance excess saves less money the higher you go. Here's what UK households need to know before adjusting their excess.
Direct answer
Raising your voluntary home insurance excess can reduce your premium, but the savings shrink significantly as the excess increases. According to MoneySuperMarket data from early 2026, a £50 excess saves around £4.67 on buildings cover, while a £1,000 excess saves only about £27 — a much smaller proportional gain for a far larger financial commitment if you need to claim. The right excess level depends primarily on how much you could afford to pay at short notice.
Is Raising Your Home Insurance Excess Worth It?
With household bills still under pressure, many UK homeowners are looking for ways to trim their home insurance costs. One of the most commonly suggested tactics is raising your voluntary excess — the amount you agree to pay towards any claim. The logic seems straightforward: take on more risk yourself, pay a lower premium. But new data published in April 2026 suggests the reality is more nuanced, and for many households, the trade-off may not be as attractive as it first appears.
What's Happening
Price comparison website MoneySuperMarket analysed home insurance quotes run through its platform between 31 December 2025 and 31 March 2026. The data, reported by Which? on 28 April 2026, shows that while adding a voluntary excess does reduce your premium, the savings become proportionally smaller — and less worthwhile — the higher the excess goes.
For buildings insurance, agreeing to pay the first £50 of any claim reduces the average premium by £4.67, a saving equivalent to 9% of the excess amount. But agreeing to pay £1,000 saves only around £27.19 — just 3% of the excess. In other words, you are taking on twenty times the financial risk for roughly six times the saving.
The pattern is similar for contents insurance. A £50 excess saves an average of £3.39 (7% of the excess), while a £1,000 excess saves only £12.50 — just 1% of the excess amount.
Kara Gammell, home insurance expert at MoneySuperMarket, explained the reasoning: once an excess reaches a certain level, transferring more risk to the customer makes less difference to an insurer's overall exposure, which limits how much further the premium can fall.
Why It Matters
The diminishing return on higher excesses matters because the excess is not just a number on a form — it is a financial commitment you must be able to meet if something goes wrong. If your total buildings excess is £500 and you raise it to £1,000 to save roughly £27 on your annual premium, you are accepting £500 more financial exposure for a saving of around £1 compared with the £500 excess level. That is a significant imbalance.
There is also a second layer of cost that is easy to overlook: compulsory excesses. These are amounts your insurer sets independently, and they apply to every claim regardless of any voluntary excess you have chosen. In a claim, you pay both figures combined.
According to Which?'s survey of insurers carried out in June–July 2025, compulsory excesses for most buildings and contents claims were typically around £100. For certain claim types — notably escape of water — average compulsory excesses were closer to £400. This means a policyholder with a £300 voluntary excess and a £400 compulsory escape-of-water excess would need to find £700 before their insurer paid a penny.
Who Is Affected
This applies to any UK household with buildings or contents insurance — whether you own your home or rent and hold a standalone contents policy. It is particularly relevant for households that are considering adjusting their excess at renewal to offset rising costs elsewhere, or for first-time buyers setting up home insurance for the first time and unsure what excess level to choose.
Those on tighter budgets or without accessible savings are most exposed to the risk of setting a high excess they cannot comfortably meet at short notice.
What to Do Next
Choose an excess based on what you can afford to pay, not just what saves the most on paper. The primary question is: if something went wrong tomorrow, could you pay your total excess — voluntary plus compulsory — without serious financial difficulty? If the answer is no, your excess is too high.
Check your compulsory excess before adjusting your voluntary one. Your policy documents or quote summary should set out the compulsory excess for each type of claim. For escape-of-water claims in particular, this figure can be substantial.
Consider whether shopping around delivers better value than raising your excess. Premiums generally rise the closer you are to your renewal date, so comparing quotes early — several weeks before renewal — can produce meaningful savings without increasing your exposure in a claim. Being willing to switch insurer or negotiate with your existing one may achieve a £20–£30 reduction without the downside risk of a higher excess.
Keep a modest emergency fund if you do carry any voluntary excess. Even a relatively low excess of £150–£200 combined with a compulsory excess could mean finding £300 or more at short notice. Having that amount accessible reduces the stress of making a claim.
If you are also looking to reduce other household bills — such as energy, broadband, or mobile — comparing your current deals against the market can be a straightforward way to find savings. You can compare household bills at Taupia to see whether switching could cut your costs.
FAQs
How much can I save by raising my home insurance excess? Based on MoneySuperMarket data from Q1 2026, a £50 voluntary excess saves an average of £4.67 on buildings insurance and £3.39 on contents insurance. A £1,000 excess saves around £27.19 on buildings and £12.50 on contents — but the percentage saving falls sharply as the excess rises.
What is the difference between a voluntary and compulsory excess? A compulsory excess is set by your insurer and applies to every claim. A voluntary excess is an additional amount you choose to add. In a claim, you pay both combined. Which? found compulsory excesses for most buildings and contents claims were typically around £100 as of mid-2025, rising to around £400 for escape-of-water claims.
Is a higher excess always a bad idea? Not necessarily. If you never make a claim, a higher excess costs you nothing and you keep the small premium saving. The key question is whether you could comfortably afford to pay the total excess at short notice if something went wrong.
Are there better ways to reduce my home insurance premium? Shopping around early — before your renewal date — is widely considered one of the most effective approaches. Comparing quotes and being willing to switch or negotiate can deliver savings without increasing your financial exposure in a claim.
Sources
Key takeaways
- The premium saving from raising your voluntary excess diminishes the higher the excess goes — a £1,000 excess saves only around 3% on buildings cover versus 9% for a £50 excess.
- You pay both your voluntary and compulsory excess in any claim, so your real out-of-pocket cost is higher than the voluntary figure alone.
- Compulsory excesses for escape-of-water claims averaged around £400 as of mid-2025, according to Which? insurer surveys.
- Your primary consideration when choosing an excess should be how much you can realistically afford to pay at short notice.
- Shopping around early for home insurance quotes is likely to deliver better savings than relying on excess adjustments alone.
Frequently asked questions
How much can I save by raising my home insurance excess?
Based on MoneySuperMarket data from Q1 2026, a £50 voluntary excess saves an average of £4.67 on buildings insurance and £3.39 on contents insurance. A £1,000 excess saves around £27.19 on buildings and £12.50 on contents — but the percentage saving falls sharply as the excess rises.
What is the difference between a voluntary and compulsory excess?
A compulsory excess is set by your insurer and applies to every claim whether you like it or not. A voluntary excess is an additional amount you choose to add. In a claim, you pay both combined. Which? found that compulsory excesses for most buildings and contents claims were typically around £100 as of mid-2025, rising to around £400 for escape-of-water claims.
Is a higher excess always a bad idea?
Not necessarily. If you never make a claim, a higher excess costs you nothing and you keep the small premium saving. The key question is whether you could comfortably afford to pay the total excess — voluntary plus compulsory — at short notice if something went wrong.
Are there better ways to reduce my home insurance premium?
Yes. Shopping around early — before your renewal date — is widely considered one of the most effective ways to reduce your premium. Comparing quotes across insurers and being willing to switch or negotiate can deliver savings without increasing your financial exposure in a claim.