What is typically considered an excess in an insurance policy?

The term "excess" in an insurance policy refers to the amount that the insured is required to pay out-of-pocket before the insurer will cover the remaining costs associated with a claim. This is typically known as the deductible. When a policyholder has an excess, it means they have accepted a certain level of financial responsibility when a claim arises, allowing for a lower premium in exchange.

When a claim is made, the insurer only pays amounts exceeding this excess after the insured has paid their part. Therefore, having a clearer understanding of what an excess entails is crucial for policyholders when considering how much they may need to pay first in the event of a loss and how it affects their overall coverage and premiums.

Other concepts, like the total value of the policy limit, total amount of coverage, and penalties for policy violations, do not directly relate to the term excess and represent different aspects of insurance agreements and responsibilities.