An excess is the sum of money which is paid whenever a claim is made on an insurance policy
Normally, the policy excess is deducted from the total settlement that a claimant receives from an insurer. This deduction covers the expense associated with assessing a claim, in particular, administration costs and paying a loss adjuster to ensure the claim is genuine. To explain how a policy excess affects a claim, let’s take a simple example. A man (we’ll call him Mr. A) has been in a car accident and is claiming for €2,000 to cover the cost of repairing damages to his vehicle. The excess on Mr. A’s car insurance policy is €250.
Therefore, the sum Mr. A will receive from the insurance company when the claim is settled is not the €2,000 – but €1,750 (€2,000 minus the policy excess of €250). Each insurer has a different standard excess for each type of insurance (Car, House, Travel etc.) it offers customers. There are also higher standard excesses for certain types of claims. For example, many insurers have increased excesses for claims relating to both water damage and subsidence.
There is also the option to take on a voluntary excess where policyholders agree to have a higher standard excess on the policy in exchange for a reduced insurance premium. However, the trade-off of having a voluntary excess on top of your standard excess means you will lose more from your claim settlement amount.
Are you unsure of your policy excess?
You can always check the excess details on any of your policies by looking at your schedule given to you by your broker or insurance company. It will also outline which types of claims are subject to higher excesses. If you are looking for further advice on the matter, feel free to get in touch with a member of our staff who will gladly answer any questions you may have.