Insurance Encyclopaedia


Your excess is the amount of money that will come out of your pocket when you make a claim. Think of it as the contribution you have to make; your insurer will then pay the remaining balance.

What’s an example of an excess?

Let’s say you chose R5,000 as your excess when you bought car insurance. After a minor accident, you claim from your insurer to repair the damage. The repair on your car costs R20,000. You will have to pay R5,000 of the R20,000 and your insurer will cover the rest, i.e. R15,000.

Is it better to have a high or low excess?

The higher your excess, the lower your insurance premium will be, and vice versa. So, choosing an excess is about finding the sweet spot between what you pay on a claim and what you pay each month for your insurance.

How do I pick my excess?

One way to calculate an appropriate excess is to determine the maximum amount you can comfortably afford to pay out of your pocket if you had to make a claim tomorrow. Picking this level means you’ll avoid getting into trouble when it comes to claiming, while minimising the amount you have to pay for insurance each month.

What different types of excesses are there?

Different insurers offer different types of excesses: • Flat excess – A flat excess is a fixed amount you agreed to when you bought insurance. This amount is always the same; it does not change if you have a big or a small claim. • Percentage excess – Percentage excesses are where a certain percentage of your claim is paid by you. This means the amount you will have to contribute will vary by the size of your claim. For example if your excess is 10% of your claim, you will contribute R10,000 if you have a claim of R100,000 and R1,000 if your claim is R10,000. • Additional excesses – Additional excesses are amounts that you are required to pay on top of your basic excess when you claim. There are certain things that influence whether you have to pay an additional excess, for example if the accident happened after 10pm, the driver is younger than 25 or your policy is less than a couple of months old. Not all insurers have additional excesses so best to check your policy wording for that. With Naked we only have one flat excess you choose.