Most insurance policies include an Excess
Most insurance policies include the provision for an excess. 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.
Depending on the type of insurance policy held, an excess could be a dollar amount or a specified period of time, among other types. A policy’s excess can usually be found on the schedule of insurance and/or within the policy wording.
It’s important to review excesses when comparing and buying an insurance policy because they can be different between policies and insurers. For example, an insurance policy might be cheaper because of a higher excess. A policy holder should establish what they are prepared to incur as an excess if they need to make an insurance claim because if the excess is high, they might not be financially positioned to pay the excess. But, depending on the policy and the insurer, increasing an excess is often a good way of reducing the cost (premium) of an insurance policy. Some insurers may also allow you to pay more premium to decrease your excess.
An insurance policy may have a standard excess which is the policy’s normal excess payable in the event of a claim. A policy may also contain a voluntary excess which is when the policy holder opts to increase their excess which replaces the standard excess. An insurer may also impose an excess which means the insurer can change the standard excess to a higher amount which is often relates to underwriting and risk information. Sometimes, if there is a concern, a higher risk or a trend in claims by a policy holder, an insurer may impose a higher excess to reduce the amount of smaller claims in order to offer the insurance policy.
It’s also important to understand that certain policies may contain multiple excesses. A typical motor vehicle insurance policy is a good example of this. There may be a standard excess, an inexperienced driver excess or an age excess, among others.
In some situations, an insurer may waive an excess or there might not be an excess payable at all. Some policies and some insurers may not require an excess to be paid by a policy holder if they meet certain criteria. For example, a motor vehicle insurance policy excess might not be payable if the insured driver was not at fault and if they can provide certain information to the insurer such as the name, address, vehicle details and registration number of the at fault driver. In these situations, the insurer might be able to claim back their costs from the at fault person or their insurer.
Excesses are usually part of most insurance policies and help keep premiums lower by having the policy holder absorb or contribute to part of the loss. As mentioned above, it is important to review your insurance policy’s excesses to ensure they are affordable. It’s also important to review excesses when comparing policies because premiums can differ based on excesses. Always check the schedule of insurance and policy wording for excesses.
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FAQs
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.
What does excess mean in pet insurance? ›
While comparing pet insurance quotes and choosing between providers, you'll notice an excess amount listed as part of each policy's terms. This is how much you'll be expected to pay for each new claim you make on your pet insurance.
What does an excess mean on insurance? ›
Insurance excess is a pre-agreed amount of money that you need to pay to your insurance provider in the event of a claim, such as a car accident or a flood at home. In many cases, you'll be asked to pay the excess immediately so that the claim process can begin.
What does excess mean in travel insurance? ›
An excess is the agreed amount of money you will pay towards a claim on a travel insurance policy and can be referred to as a 'deductible'. Once the excess has been settled your travel insurance provider will then pay the remaining expenses up to the limit of cover.
What is the excess coverage? ›
Excess policies, also called secondary policies, extend the limit of insurance coverage of the primary policy or the underlying liability policy. In other words, the underlying policy is responsible for paying any portion of a claim first before the excess policy is used.
What does 20% excess mean? ›
If you have a lifetime policy, at the renewal following your pet's 8th birthday for dogs, and 10th birthday for cats, a 20% excess is introduced. This means that after the flat excess amount(s) have been taken from your claim, you'll also pay 20% of the remaining vet fees for all claims that are covered by the policy.
What does 60 excess mean? ›
If you have a £60 excess, you'll pay £60 for every completed repair. If you don't have a repair, you won't pay any excess. The same goes for £99 excess. If you've already got cover with us, you can find your excess amount in your online account.
Do I pay excess if I am not at fault? ›
Do I pay excess if accident is not my fault? – typically yes. Your insurer should recover the money from the insurer of the at-fault driver – eventually, then they will pay it back to you.
What does $200 excess mean? ›
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.
Is it worth having excess on insurance? ›
Increasing your excess is only really worth doing if you can afford to pay it. 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.
So, for example if you have an excess of $100 this means that if you claim with us, we'll deduct $100 from your claim before we make any payment to you.
What does $5000 excess mean? ›
So, if your car has been damaged in an incident, and the repair bill comes to $5000, you will pay for the first portion of the repair bill with your excess. If your excess is $500, the insurance company will pay for the remaining $4500. This doesn't mean you always have to pay the excess if you have an accident.
Why is it called excess insurance? ›
An adjuster may claim that a policy is “excess” because it contains an “other insurance” provision, which changes or limits the available benefits when additional insurance coverage applies to the same loss.
What does the excess on insurance mean? ›
Insurance excess is the amount you have to pay towards the overall cost of an insurance claim. It's usually a pre-agreed amount. Your insurer will then contribute the rest – up to the limit of the cover. You'll see insurance excess on insurance products like travel, motor, home and health.
What are the benefits of excess insurance? ›
Excess and surplus lines insurance covers policyholders that have unique risks, extra high risks, and/or poor loss history. These candidates would generally be unable to obtain insurance through standard lines, meaning that there's a huge gap in coverage for them.
Is a higher excess better insurance? ›
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.
How much is many pets' excess? ›
We offer a choice of a £69, £99, £130 and £160 excess across all our policies for pets under nine years old. That lets you decide how much you want to save on premiums by paying slightly more if you do need to claim.
Can you get pet insurance with no excess? ›
Yes, you can get pet insurance without excess. It's sometimes called “no excess pet insurance”, or “0 excess pet insurance”. This is where you won't have to pay an excess charge when you make a claim. However, having no excess charge doesn't always mean the insurance is cheaper.
What is excess value coverage? ›
If Excess Value coverage is purchased, the maximum insured value is increased to the new limit purchased. Excess value coverage is not a guaranteed value. The value of the claim is limited to the actual cash value up to the amount purchased. Certain types of vehicles are eligible for Excess Value coverage options.
What excess do you pay with Petplan? ›
You'll pay 20% of all pet treatments on top of your fixed excess. We'll remind you of this a year before it happens. You can check your excesses at any time on your Certificate of Insurance.
