What is insurance excess all about?

When it comes to insurance excess, many of us are left wondering why we have to pay it, especially if we were not to blame for the accident in the first place.

So what is insurance excess?

Well, in insurance speak, an excess is the “first amount payable” by you in the event of an accident or loss. The insurance company will then settle the balance of your claim on your behalf.

For example:

If the excess on your car is R3 000 and the repairs amount to R25 000 the insurer will pay the remaining R22 000 once you have paid your excess to the repairer, or agreed to your insurer deducting the amount from what they pay over to the repairer.

What are your options?

If you prefer not to be caught unawares, you can choose to pay a slightly higher monthly premium instead of having to pay an excess, however this excess waiver is often only applicable to the basis excess, though, and you could still find yourself responsible for any additional excess noted on the policy.

On the flip side, you could also choose to pay a higher excess as a way of lowering your premium.

But what if it’s not your fault?

Unfortunately, regardless of who was to blame for an accident or loss, you are still liable for the excess amount. This serves to keep premiums down and deters customers from repeatedly submitting minor or fraudulent claims.

But it’s not all doom and gloom, as you can still claim the excess amount back from the guilty party if you’re not at fault. This can take a while, especially if the guilty party isn’t insured, but most insurance companies have a legal recoveries department that will do their utmost to recover your excess free of charge and you will be refunded your excess if they are successful.

From basic excess, to theft excess, to time of accident excess and more, there are a variety of different excesses that can be included in one policy, so sit down with your broker and make sure you understand exactly what you’re liable for.