What is Excess Insurance?

What is Excess Insurance? So it provides coverage for a claim when the primary insurance limit has been reached. For instance, if the primary insurance limit is $50,000 and the excess policy covers an additional $25,000, a claim of $60,000 would result in a $50,000 payout from the primary insurance and $10,000 from the excess policy.

Excess policies, also known as secondary policies, increase the coverage limit of the primary policy or the liability policy that it is based on. This means that the primary policy is responsible for paying a portion of the claim before the excess policy comes into play. However, the primary policy may not necessarily be a primary insurance policy, but could be another excess policy. Regardless of the type of insurance policy, the primary policy always pays before the excess policy.

Where can you find it?

It applies to various insurance policies, including:

  • Car insurance: You’ll typically have an excess for collisions, theft, and other covered events.
  • Home insurance: Excesses apply to damage caused by fires, floods, and other insured perils.
  • Travel insurance: You might have an excess for medical expenses, trip cancellation, and lost luggage.
  • Pet insurance: Excesses often apply to vet bills and treatment costs.

Key things to know

The key things to know about it:

  • Amount: This varies depending on your chosen policy and coverage level. Generally, a higher excess results in a lower premium, and vice versa.
  • Multiple Excesses: If you make multiple claims within a single policy period, you might have to pay the excess for each claim.
  • Claim Impact: If your claim cost is lower than your excess, you’ll have to bear the entire expense yourself.
  • Optional Excess Cover: Some insurers offer add-on policies that cover your excess amount in case of a claim.


It’s important for controlling your insurance expenses and obligations. Knowing its functioning can assist you in making informed choices about your coverage and guaranteeing sufficient protection when necessary.