The Meaning of “Excess” in Car Insurance

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Joel Ohman
Founder, CFP®

UPDATED: Nov 3, 2016

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Here's what you need to know...
  • When referring to car insurance, excess means the same as the deductible
  • Essentially both terms refer to the amount a driver must pay before the insurance company
  • Usually having a higher excess or deductible means you will have a lower yearly premium

The word “excess” in car insurance terminology is synonymous with “deductible.”

Excess is the term commonly used in British English, while deductible is the word employed in American English.

Both terms represent the amount an insured driver must pay toward a claim before the insurance company kicks in the rest.

  • In British English, the etymological rationale for the terminology is that the amount is in excess of what the insurance company has agreed to pay
  • In American English, one is conveying that the amount is deducted from the full amount of the claim agreed upon by the insurer

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How Excess and Deductibles Can Save You Money In Any Language


When it comes to the meaning of excess in car insurance terminology, a discussion of the more commonly used deductible is in order.

Deductibles are a crucial issue when trying to find the best car insurance rates and policy for your situation.

The higher your deductible, or excess is, the less you will pay for your yearly car insurance premium.

You determine whether you would be better served by paying a lower car insurance premium with each policy renewal or by spending less on the excess when you end up having to file a claim.

You can also use the excess payment to help you determine if certain forms of car insurance are actually necessary for you.

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Types of Insurance

Two common examples of potentially unnecessary forms of insurance fall into the categories of collision and comprehensive insurance:

  • Collision insurance insures against damages sustained by your car in a collision with another car
  • Comprehensive insurance is protection against damages to your car from acts of nature, vandalism, theft, or animals

While both collision and comprehensive are required by your bank if you are leasing or financing the vehicle and are most likely a wise expenditure if your car is new or especially valuable, there is an equation you can try to determine if your particular situation demands these forms of coverage.

The rule of thumb is this: if your yearly premium for collision and/or comprehensive car insurance is less than 10 percent of the value of your vehicle, then a little smart financial planning could release you from the need to pay for such coverage.

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Utilize an on-line quote comparison tool to compare quotes from an array of car insurance providers.

Just type in your personal information and your desired coverage including the excess payments that you have determined are best for your situation, and you will receive several quotes immediately.

Whether you use the Queen’s English or the American term, what the Bard said back in the day remains true when it comes to car insurance, “A rose by any other name would smell as sweet.”

A good deal is a good deal in any language!

Compare car insurance quotes today with the FREE tool on this page by entering your ZIP code now!

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