What is excess in car insurance?

In the field of insurance, an excess refers to the amount the policyholder agrees to pay toward the repair costs of their vehicle following an accident, provided this element is included in the policy. The main advantage of choosing a car insurance policy with an excess is that, by sharing part of the risk between both parties, the premium becomes significantly cheaper than that of a policy without excess and without affecting the scope or quality of the cover provided.

When we talk about insurance with excess, we are referring to policies, primarily auto insurance, in which the financial risk in the event of a claim is shared to some degree by both parties. In exchange, the policyholder benefits form a substantial reduction in the cost of the policy.

In other words, the customer and the insurer agree in advance on a set amount, know as the excess, which the policyholder must pay if repair costs arise because of a claim. The insurer covers the remaining amount once the excess has been deducted, ensuring the vehicle can be repaired and put back on the road as quickly as possible.

For example, if an assessor determines that the repair costs after an accident amount to 1.100€, and the excess stated in the policy is 300€, the policyholder will have to pay those 300€ while the remaining 800€ will be covered by the insurer.

Differences between car insurance with and without excess

The key difference is that a policy with an excess offers the same level of coverage as a standard comprehensive policy but at a significantly lower premium.

In this regard, the higher excess you are willing to take on, the greater the discount applied to your premium, again without reducing the coverage included in your car insurance or limiting the protection it provides in any way.