Voluntary Excess
Choosing a higher voluntary excess can lower your car insurance premium, but it also means paying more yourself if you make an eligible claim.
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What is voluntary excess in car insurance?
Voluntary excess is an amount you agree to pay towards an eligible claim when you buy your car insurance policy.
It is separate from any compulsory excess that may apply under the policy.
For example, if your policy has a RM500 voluntary excess and you make an eligible RM5,000 own-damage claim, you may have to pay the RM500 excess, with the remaining amount handled according to your policy terms.
The exact application depends on the policy. Read BJAK's guide to what excess means in car insurance for more details.
How does voluntary excess work?
The trade-off is straightforward:
Higher voluntary excess → potentially lower premium
But:
Higher voluntary excess → higher amount you pay when making a claim
This lets you choose how much risk you are comfortable taking.
However, the premium savings depend on the insurer and policy. Compare quotes with different excess amounts before deciding.
Example of voluntary excess
Suppose you choose:
Voluntary excess: RM500
Later, you make an eligible own-damage claim of:
RM3,000
If the excess applies, you would pay RM500 and the remaining amount would be handled by the insurer according to the policy.
If your voluntary excess was RM1,000 instead, your potential out-of-pocket amount would be higher.
Voluntary excess vs compulsory excess
These terms are often confused.
| Voluntary excess | Compulsory excess | |
|---|---|---|
| Who chooses it? | You, subject to the options offered | Set by the policy |
| Purpose | You agree to pay more to potentially reduce your premium | Applies when specific policy conditions are triggered |
| Amount | Depends on your choice and policy | Depends on the policy terms |
| Can you choose RM0? | Depends on the insurer | Not optional when applicable |
A compulsory excess of RM400 may apply to an own-damage claim if the driver is under 21, holds a P or L licence, or is not named in the policy, subject to the policy terms.
Choosing voluntary excess does not automatically remove compulsory excess.
Read BJAK's guide to All Drivers Car Insurance and the RM400 compulsory excess to understand when the additional excess may apply.
Who should choose a higher voluntary excess?
A higher voluntary excess may suit you if:
- You rarely make claims.
- You have enough savings to cover the excess.
- You want to reduce your annual premium.
- You are comfortable taking on more financial risk.
A lower excess may be better if paying a large amount after an accident would be difficult.
How much voluntary excess should I choose?
There is no single amount that works for everyone.
Consider these factors before deciding.
Your emergency savings
Don't choose an excess you would struggle to pay after an accident.
How often you drive
If you drive every day, you may want to keep your out-of-pocket risk manageable.
Your premium savings
Compare how much you actually save by increasing the excess. A lower premium may not be worth it if the savings are small compared with the additional amount you could pay after a claim.
Your car's value
Think about the size of potential repair bills compared with the excess you are taking on.
Does voluntary excess affect NCD?
Voluntary excess and NCD are separate concepts.
Excess determines how much you may have to contribute towards a claim.
NCD determines the discount you receive on your premium based on your claim-free record.
An eligible at-fault own-damage claim can affect your NCD regardless of whether you selected a voluntary excess. The excess itself does not determine your NCD.
Read BJAK's guide to how car insurance claims can affect your NCD to understand what may happen after a claim.
Is voluntary excess worth it?
It depends on your financial situation.
If you have enough savings and want to reduce your annual premium, a higher voluntary excess may make sense.
But don't choose an excess simply because it gives you the cheapest quote. Compare the premium savings against the extra amount you may need to pay after a claim.
You should also compare coverage, exclusions and other policy conditions before making a decision. Start by comparing car insurance quotes on BJAK.
How to compare voluntary excess car insurance
When comparing quotes, look beyond the headline premium.
Check:
- Annual premium
- Voluntary excess
- Compulsory excess
- NCD
- Coverage
- Add-ons
- Exclusions
- Repairer options
- Claims process
Voluntary Excess FAQs
Voluntary excess is the amount you agree to contribute towards an eligible claim in exchange for potentially paying a lower insurance premium. Learn more in BJAK's guide to voluntary excess in car insurance.
It can reduce the premium, depending on the insurer and policy. Compare the actual quotes to see how much you could save.
No. Voluntary excess is an amount you choose from the options available, while compulsory excess applies when specific conditions in the policy are triggered.
It depends on the insurer and policy options available.
It can be useful if you have enough savings to cover the excess and want to reduce your annual premium. Compare the actual premium savings against the extra amount you may have to pay after a claim before choosing.