Excess, limits and exclusions work together to determine what actually lands in your account — and none of them are optional extras you can ignore until claim time.
Excess: what you pay first
Excess is the amount you contribute toward a claim before the insurer pays the rest. Many Australian policies combine a basic excess with additional excess amounts for specific circumstances — for example, an extra excess for younger or less experienced drivers on a motor policy. Check your policy schedule for every excess type that could apply, not just the headline figure quoted at purchase.
Coverage limits — the ceiling on what's paid
Separate from excess, policies cap what they'll pay per claim or per category of item. A contents policy's overall sum insured doesn't guarantee a high-value single item is covered up to that same amount — check for specific item or category sub-limits.
Exclusions — what's removed entirely
Certain causes of loss are excluded outright from standard policies — gradual deterioration, or specific natural peril types depending on the policy and insurer, are common examples. An exclusion removes the entire category from coverage, regardless of excess or limits.
Estimating your real payout
Take the estimated loss, subtract any applicable excess, check it against the relevant coverage limit or sub-limit, and confirm the loss type isn't excluded entirely. Doing this before lodging a claim sets realistic expectations and flags anything that might fall outside what the policy actually covers.
See also: in the US, this same shortfall is called a deductible — see how it works there.
Sources
Related Kibbo Tools
- Insurance Policy Coverage Checklist — check excess, limits and exclusions before assuming a loss is covered.
- Insurance Claim Expense & Reimbursement Tracker — track the real numbers, including excess deducted, through the claim.