An insurance excess is the amount a policyholder must contribute to an approved claim before the insurer pays the remaining covered amount. A higher voluntary excess may reduce the monthly premium, but it increases the amount the policyholder must fund when claiming. The right excess should therefore be affordable during an unexpected loss.
An insurance excess is the amount a policyholder must contribute to an approved claim before the insurer pays the remaining covered amount. A higher voluntary excess may reduce the monthly premium, but it increases the amount the policyholder must fund when claiming. The right excess should therefore be affordable during an unexpected loss.
An insurance excess is the portion of an insured loss that the policyholder pays. It is a standard feature of many short-term insurance policies, including car and household cover. The amount, structure and circumstances in which it applies are set out in the policy schedule or coversheet and policy wording.
For example, if an approved claim is R50,000 and the applicable excess is R5,000, the policyholder contributes R5,000 and the insurer pays the remaining R45,000, subject to the policy terms. This example is illustrative and actual settlements depend on the claim.
A standard or basic excess is the normal contribution shown on the schedule for a covered claim. A voluntary excess is an amount selected by the policyholder, often in exchange for a different premium. An additional excess may apply on top of the standard excess when stated circumstances are present.
Additional excesses can vary by policy and may relate to factors such as the driver, the use of the vehicle or the circumstances of the incident. Policyholders should never assume that the headline excess is the only amount that could apply.
Premium and excess often move in opposite directions. Selecting a higher voluntary excess may lower the monthly premium because the policyholder accepts a larger share of a future claim. Selecting a lower excess may increase the premium because the insurer carries more of the eligible loss.
The lowest premium is not always the most affordable option overall. A policy can become difficult to use if the excess is more than the policyholder can access after an accident, theft or household loss.
Insurance is priced according to risk rather than a single affordability rule. The premium and excess structure may reflect the insured asset, type of cover, claims history, driver profile, vehicle use, location, security measures and other underwriting information.
This is why two people with similar-looking policies may receive different terms. A newly licensed driver, a high-value vehicle or a particular use of the insured asset may affect the final quotation, subject to the insurer’s underwriting approach.
· Ask for quotations at more than one excess level.
· Compare the monthly saving with the additional amount payable after a claim.
· Check every standard, voluntary and additional excess on the schedule.
· Keep the chosen excess available in emergency savings where possible.
· Consider whether several excesses could apply to the same incident.
· Review the excess when finances, drivers, assets or cover change.
A useful test is simple: if a valid claim happened next week, could you pay the total applicable excess without missing essential household commitments or taking unaffordable debt? If not, the monthly saving may not justify the risk.
· What is my standard excess?
· Have I selected a voluntary excess?
· Which additional excesses can apply?
· Is the excess fixed, percentage-based or subject to a minimum?
· When and to whom must the excess be paid?
· Could more than one excess apply to one claim?
Miway’s claims information explains how excess contributions work in its claims process, while the final coversheet and policy wording confirm the amount and conditions that apply to an individual customer.
Excess is part of the real cost of insurance. Choose it with the same care as the premium and cover limit. A sustainable policy balances an affordable monthly premium with an excess that remains manageable when an unexpected claim occurs.
Not necessarily. Whether an excess applies depends on the cover, type of claim, circumstances and policy terms. The claims consultant should confirm the applicable amount.
Yes. A standard excess and one or more additional excesses may apply if the circumstances listed in the schedule or wording are present.
A higher voluntary excess may reduce the premium, but pricing depends on the complete risk profile and the insurer’s underwriting rules.
The timing depends on the claim and insurer. It is commonly payable after approval and before repairs are completed or settlement is finalised.
Check the policy schedule or coversheet and wording. Ask the insurer to explain the standard, voluntary and additional excesses before accepting cover.
