{"id":1206,"date":"2017-03-28T12:24:33","date_gmt":"2017-03-28T10:24:33","guid":{"rendered":"https:\/\/www.namfisa.com.na\/educates\/?p=1206"},"modified":"2025-07-18T14:38:07","modified_gmt":"2025-07-18T12:38:07","slug":"insurance-excess","status":"publish","type":"post","link":"https:\/\/www.namfisa.com.na\/educates\/insurance-excess\/","title":{"rendered":"Insurance Excess"},"content":{"rendered":"\t\t
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Preface<\/h3><\/span><\/div>
When you buy a new car, it is prudent to take out\ninsurance cover for the vehicle. One important\nthing that an insurance agent, broker or an\ninsurance company will speak to you about, will be the\ninsurance excess.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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1. What is an insurance excess?<\/h3><\/span><\/div>
When you buy short-term car insurance, one key term you'll hear is \u201cinsurance excessInsurance excess is the additional sum of money that an\ninsurance company requires policyholders to pay for a loss. The\nexcess is usually paid to the garage repairing your car before you\ncan collect your car.\nFor example: Mr. Severus Jacobs took out a short-term\ninsurance cover for his car. His car was involved in an accident\nand he gets a quotation for the repair of the damages amounting\nto N$ 75 000. Should he have signed up for an excess amounting\nto N$ 15 000, his insurance company will only pay out N$60\n000 while he will have to pay N$15 000 out of his own pocket..\u201d This is the amount you must pay out of your own pocket when claiming for damages \u2014 before your insurer covers the rest.\n

\n\nInsurance 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\u2019ll pay the rest.<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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2. Different forms of excesses<\/h3><\/span><\/div>
There are different forms of excesses namely compulsory\nand voluntary excess. Compulsory excess refers to the excess\nimposed by insurer onto the insured. Compulsory excess might\nbe higher for new, younger or inexperienced drivers. You are\nalso likely to paying higher excess fee should you be driving a\nluxury car.\nVoluntary excess refers to what is being accepted by the\ninsured in return for premium discount. The higher your\nvoluntary excess the lower the premium you will have to pay to\nthe insurance company. However, you should be prepared to be\nable to pay the excess should anything happen to your car.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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3. How will policyholders know about their insurance excesses?<\/h3><\/span><\/div>
When policyholders are buying short term insurance they\nshould ask an insurance agent, broker and insurance company\nthey are dealing with to explain to them the additional amount\nthey will pay for the loss against their insured valuables. In\naddition to that, policyholders should also carefully read and\nunderstand the conditions of their insurance contracts.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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4. What is the difference between a high excess and a low excess?<\/h3><\/span><\/div>
A high excess insurance cover means that policyholders will\npay more out of their pocket when a claim arises and a low\ninsurance excess cover means that policyholders will pay a\nlesser amount out of their pocket.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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5. What are the reasons for me to pay high excess or low excess?<\/h3><\/span><\/div>
You will pay high voluntary excess should you want to do so.\nThe higher your excess, the lower your insurance premiums are\ngoing to be. However, should a claim arise you must be able to\npay the excess out of your own pocket. A high insurance excess\nis derived from high risk policyholders i.e. policyholders that a\nspecific insurer have rated as high insurance risk and low risk\npolicyholders that an insurer have rated them as low insurance\nrisk.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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6. What if I agree for excess and do not have money at the time of claim?<\/h3><\/span><\/div>
Let\u2019s look back at the example of Mr. Severus Jacobs\nmentioned above and the case whereby he has to pay N$ 15 000\nexcess. The garage will not release the car until he paid up the\nexcess amount he agreed upon.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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7. How does the low or high excess affect my insurance premium?<\/h3><\/span><\/div>
As indicated above under point 5, a high insurance\nexcess means that policyholders will be paying low monthly\ninsurance premiums while a low insurance excess means that\npolicyholders will be paying high monthly insurance premiums.\nThis is because of risk-sharing between insurer and insured.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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8. Can my high claim ratio affect the excess I have to pay?<\/h3><\/span><\/div>
Yes, a high claim ratio will cause your excess to increase and\nthis will also result in your monthly premium to increase. The\nmore claims you submit to the insurer to pay out, the more your\nclaim ratio goes up and you might be classified as a risky client.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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9. When don\u2019t I have to pay excess?<\/h3><\/span><\/div>
Should you be involved in a car accident and you were not at\nfault meaning the person who caused an accident is known by\nyou and you have clear evidence e.g. accident record from the\npolice station, the insurer mostly will pay out the whole claim\nand pursue the person at fault to recover the money.\nClaims arising from natural disasters and accidents caused\nby unknown persons are treated differently, as such you will be\nresponsible to pay the excess fee.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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10. What conclusion can we draw from insurance excesses?<\/h3><\/span><\/div>
Excess is very crucial to both the policyholder and the insurer.\nHence, the policyholders should make sure that they understand\nthis concept to avoid complications and disappointments when\nan insurance claim arises. Remember the more voluntary\nexcess, the less your insurance premium. But you will be paying\nmore out of your pocket should you incurred a claim.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Summary<\/h3><\/span><\/div>
When you buy short-term car insurance, one key term you'll hear is \u201cinsurance excess.\u201d This is the amount you must pay out of your own pocket when claiming for damages \u2014 before your insurer covers the rest.\n\nInsurance 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\u2019ll pay the rest.<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Types of Excess<\/h5><\/div>
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  • <\/span>Compulsory Excess: Set by the insurer. Often higher for: young or inexperienced drivers, luxury or high-risk vehicles.<\/li>
  • <\/span>Voluntary Excess: Chosen by the policyholder. A higher voluntary excess means lower monthly premiums, but you\u2019ll need to pay more if a claim arises.<\/li><\/ul><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Why It Matters<\/h5><\/div>
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    • <\/span>Higher excess = lower premiums <\/li>
    • <\/span>Lower excess = higher premiums <\/li>
    • <\/span>If you don\u2019t have the excess amount when a claim is approved, your car won\u2019t be released by the repairer<\/li><\/ul><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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      • <\/span>You\u2019re not at fault, and the at-fault party is identified <\/li>
      • <\/span> You have proof (e.g., police report) <\/li>
      • <\/span>Your insurer can recover the money from the other driver<\/li><\/ul><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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        <\/h5><\/div>
        However, for natural disasters or unknown third-party damage, you\u2019ll likely still pay the excess.\n<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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        Claim History Matters<\/h5><\/div>
        If you claim frequently, your insurer may:<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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        • <\/span>Increase your excess <\/li>
        • <\/span>Raise your premiums <\/li>
        • <\/span>Classify you as a high-risk client<\/li><\/ul><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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          What You Should Do<\/h5><\/div>
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          • <\/span>Ask questions before signing your policy <\/li>
          • <\/span>Understand the excess amount in your contract <\/li>
          • <\/span>Make sure you're financially prepared to pay the excess if needed<\/li><\/ul><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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            <\/h5><\/div>
            Insurance excess is a cost-sharing tool that helps keep premiums manageable. Know what you\u2019re agreeing to \u2014 and always read the fine print. The more you understand, the fewer surprises you\u2019ll face when it\u2019s time to claim.<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

            Preface When you buy a new car, it is prudent to take out insurance cover for the vehicle. One important thing that an insurance agent, broker or an insurance company<\/p>\n","protected":false},"author":1,"featured_media":1207,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_EventAllDay":false,"_EventTimezone":"","_EventStartDate":"","_EventEndDate":"","_EventStartDateUTC":"","_EventEndDateUTC":"","_EventShowMap":false,"_EventShowMapLink":false,"_EventURL":"","_EventCost":"","_EventCostDescription":"","_EventCurrencySymbol":"","_EventCurrencyCode":"","_EventCurrencyPosition":"","_EventDateTimeSeparator":"","_EventTimeRangeSeparator":"","_EventOrganizerID":[],"_EventVenueID":[],"_OrganizerEmail":"","_OrganizerPhone":"","_OrganizerWebsite":"","_VenueAddress":"","_VenueCity":"","_VenueCountry":"","_VenueProvince":"","_VenueState":"","_VenueZip":"","_VenuePhone":"","_VenueURL":"","_VenueStateProvince":"","_VenueLat":"","_VenueLng":"","_VenueShowMap":false,"_VenueShowMapLink":false,"footnotes":""},"categories":[434],"tags":[],"class_list":["post-1206","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-short-term-insuarence"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/1206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/comments?post=1206"}],"version-history":[{"count":7,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/1206\/revisions"}],"predecessor-version":[{"id":35637,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/1206\/revisions\/35637"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/media\/1207"}],"wp:attachment":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/media?parent=1206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/categories?post=1206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/tags?post=1206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}