What is insurance excess and how does it work?

3 MIN READ October 15, 2020
If you’ve got any insurance policies in place, you might have heard about excess. You probably have a certain amount of insurance excess on your existing policy, but do you know how much? And how does it actually work? We’ve put the answers to some…

What is insurance excess?

The insurance excess definition is the amount of money that you pay toward any losses when you make a claim. It is your contribution to a claim, and the insurance provider covers the rest. Excess is designed to keep the cost of handling insurance claims down, and to keep insurance premiums affordable. Excess can also be a good incentive to make sure people are taking more care of their possessions.

When would I need to pay my excess?

Whenever you make a claim, you’ll need to pay your specified excess amount. If you’re not sure how much that is, you can take a look through your policy wording, or ask your adviser.
Your policy wording should also tell you when you might not need to pay your excess, depending on your provider and the circumstances.

Can my excess be waived?

Whether your excess can be waived or not depends on your specific provider and the policy that you have. In some circumstances, for example if you are not at fault, then your excess may be waived. This isn’t the case for all providers though, so it’s best to check your policy wording or talk to an adviser.

What are the different types of excess?

Basic/Standard Excess

This is a standard excess that would apply to any claim. Different providers and policies will have different amounts of standard excess.

Voluntary Excess

A voluntary excess is one that you can choose to make higher in order to have a lower premium. This can be a good option if you don’t make many claims and will have that money to pay should you need to claim.

Imposed Excess

This is an excess that will be set by your provider usually when there is a higher risk involved. This might happen when your home is often unoccupied, or if your vehicle is a commonly stolen model.

Age/Licence Excess

This one is for car insurance policies. Depending on who is driving your car, there may be a higher excess involved if they are under 25 or don’t have their full licence. This excess is in addition to your standard excess – depending on who is driving during an accident, you may need to pay more in excess if you have this condition.

If you want to know more about what amount of excess you have, or you want to change your excess, get in touch with us today and we can get you sorted.


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