What is excess?

  • Excess, also called deductible, is to the first amount of the claim which the insured has bear. The insurer normally imposes some excess as this would serve as a form of co-insurance. With an excess, the insured would tend to be more careful because if a claims occur, the insured also has to fork out of his/her own pocket and contribute towards the claim. In general, the higher the excess, the more careful the insured would be and hence the lower risk of making a claim.
  • Type of Excess:
    1. Excess All claims
      It means the total excess applicable for every accident.
    2. Excess – Damage claims
      Your insurance policy is divided into many sections. Normally, there are two kinds of sections: Section 1 and Section 2.

      • Section 1. The Excess in Section 1 means the excess applies to an own damage claim only. Take this scenario, if you see terms such as Excess: $500 (Section 1 Only) means the excess applies to an own damage claim only. That means, the insured hits another vehicle and his own damage is $5,000 and the third party’s damage is $9,000, then the excess of $500 shall only apply to his own damage claim, ie the insured only pays $500 and the insurer pays $4,500 for his own damage of $5,000. As for the third party claim, the insurer would pay the full amount of $9,000.
      • Section 2. This section deals with Third Party Claims. So if there is an excess in this section, it means if there is any third party claim payable this excess shall apply. Take the scenario above as well, if you see terms such as Excess: $500 (Section 2) on the policy, the insured pays $500 and the insurer pays $4,500 for his own damage of $5,000; for the third party claim, the insured has to fork out also $500 while insurer would pay $8,500 for a claim of $9,000.
    3. Young, Inexperienced and Elderly Drivers Excess
    4. Unnamed Driver Excess
      Liable when claiming your own insurance to repair your accident vehicle, and the driver is not listed as Named Driver at the insurance policy.
    5. Excess – Third Party (Property) Damage
      You can’t claim your own insurance. The insurer will only cover the damage of other vehicles, property etc if you’re liable for the accident.
  • Some insurers might provide a option that you can choose higher Excess to reduce your insurance premiums. Please check with the insurer base on your driving experience and age.
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