What does excess mean in insurance? (2024)

FAQs

What does excess mean in insurance? ›

An excess (also known as a deductible) is an amount the policy holder must pay if they proceed with making an insurance claim on their insurance policy. It's the first amount payable by the policy holder in the event of a loss and is referred to as the uninsured portion of the loss.

Because your insurer won't usually pay out for a claim that costs less than your total excess, it's wise not to push your voluntary excess too high. The point of an insurance policy is that you can claim on it. If your compulsory excess is high, you might want to keep your voluntary excess as low as possible.

Having an excess means that you have to pay part of your treatment costs up to the amount of your excess. For example, if you have treatment that costs £3000 and you have agreed an excess of £500, you'll pay £500 and your insurer will pay the remaining £2500.

For example, your insurer might say that you have a 10% of claim excess. So, if you have a claim of R100,000 you will contribute 10% of R100,000 (i.e. R10,000) and your insurer will pay the remaining R90,000.

Excess insurance covers a claim after the primary insurance limit has been exhausted or used up. Reinsurance is a way of an insurer passing policies to another insurance company to reduce the risk of claims being paid out.

For example, if you purchase your policy with a $200 excess and you submit a claim for $600, you are liable for the first $200 and we would reimburse $400. The lower the excess amount you choose, the higher your insurance premium.

Understanding Excess

If your policy's excess was set at $100, it means when you go to file an eligible claim that is accepted, $100 will be deducted from any claim payment Our standard excess amount is $100 but you can choose to remove or double this amount through the purchase process.

When is a car insurance excess paid? If your car is repairable, we'll ask you to pay your car insurance excess before the repairs start. If your car is written off and we are paying you a total loss settlement, we'll deduct the excess from the final settlement amount we pay you.

phrase. In excess of means more than a particular amount. [formal]

Do you pay the excess if you aren't at fault? You will need to pay your excess if you're in an accident and you make a claim, even if it wasn't your fault.

What does excess insurance cover? ›

An excess liability insurance policy, also known as excess liability coverage, offers financial protection and higher policy limits if a claim is made that exceeds the limit of an underlying liability policy. It's similar to having an additional insurance policy on top of your existing coverage.

You only need to pay the excess if you make a claim. Some policies have a cap on what you pay – so you pay an excess only once each policy year, regardless of how many claims you make. Others charge an excess every time you make a claim, so it's worth keeping that in mind when you're choosing insurance.

A deductible basically reduces the maximum payout, but an excess doesn't. Let's see an example: Scenario 1: A policy has sum insured 1,000 and excess of 100: If the loss to the insured is 500, the insurer will pay out 400.

What's an excess? When you make a claim, your excess is the dollar amount that comes out of your pocket when your vehicle needs repair. The rest is covered by your policy. For example: If your repair bill is $10,000 and your excess is $500, then you pay $500 and your insurer pays $9,500.

By opting for a higher excess, you may see significant savings on your insurance costs. This can be especially beneficial for those with a low-risk profile or a history of few claims, as they are less likely to need their insurance coverage frequently.

A higher excess will reduce your premium. A lower excess means you'll pay less if you make a claim, but your premium will be higher. If you choose our highest level of cover, you'll have the extra flexibility of a no-excess option – again, this will be reflected in your premium.

Generally, the higher your excess is, the lower your premiums will be. Just like with your car or home insurance, an excess is a contribution you're required to pay towards a Hospital claim you make on your policy. It's paid directly to the hospital when you're admitted for treatment.

An excess is the amount you'll pay upfront (out of your own pocket) before you're admitted to hospital for planned treatment. Generally, the higher your excess, the lower your premiums will be (and vice versa).

The amount of excess payable on your home insurance should initially depend on how much you can afford. You should be realistic with the amount of cover you need. If you're combining both contents and building insurance, you need to give an accurate value of your contents.

An excess (also known as a deductible) is an amount the policy holder must pay if they proceed with making an insurance claim on their insurance policy. It's the first amount payable by the policy holder in the event of a loss and is referred to as the uninsured portion of the loss.