Insurance Excess

Understanding Insurance Excess

When you buy short-term car insurance, one key term you'll hear is “insurance excess.” This is the amount you must pay out of your own pocket when claiming for damages — before your insurer covers the rest.

Insurance excess is the portion of a claim the policyholder must pay. For example, if your car repairs cost N$75,000 and your excess is N$15,000, your insurer will only cover N$60,000, and you’ll pay the rest.
Types of Excess
  • Compulsory Excess: Set by the insurer. Often higher for: young or inexperienced drivers, luxury or high-risk vehicles.
  • Voluntary Excess: Chosen by the policyholder. A higher voluntary excess means lower monthly premiums, but you’ll need to pay more if a claim arises.
Why It Matters
  • Higher excess = lower premiums
  • Lower excess = higher premiums
  • If you don’t have the excess amount when a claim is approved, your car won’t be released by the repairer
  • You’re not at fault, and the at-fault party is identified
  • You have proof (e.g., police report)
  • Your insurer can recover the money from the other driver
However, for natural disasters or unknown third-party damage, you’ll likely still pay the excess.
Claim History Matters
If you claim frequently, your insurer may:
  • Increase your excess
  • Raise your premiums
  • Classify you as a high-risk client
What You Should Do
  • Ask questions before signing your policy
  • Understand the excess amount in your contract
  • Make sure you're financially prepared to pay the excess if needed
Insurance excess is a cost-sharing tool that helps keep premiums manageable. Know what you’re agreeing to — and always read the fine print. The more you understand, the fewer surprises you’ll face when it’s time to claim.
wpChatIcon
wpChatIcon
Skip to content