What is the excess and how does it work?

Excess refers to the amount of money a policyholder is required to pay out of pocket when making a claim on an insurance policy, such as those offered by Direct Line Insurance. The excess is typically specified in the terms of the insurance contract and can vary depending on the policy chosen. There are generally two types of excess: compulsory excess and voluntary excess. Compulsory excess is the amount that is set by the insurance provider and is mandatory for all policyholders. This is the minimum amount you must pay in the event of a claim. On the other hand, voluntary excess can be chosen by the policyholder. By selecting a higher voluntary excess, an individual may benefit from lower premiums, but it also means that they will bear more of the financial responsibility in the event of a claim. When making a claim, the excess will be deducted from the total amount the insurer pays for the loss or damage. For example, if the cost of the claim is one thousand pounds and there is an excess of one hundred pounds, the policyholder would receive nine hundred pounds from the insurer. Understanding how the excess works is essential for policyholders as it affects both the claims process and the overall cost of insurance. For further details, it may be beneficial to consult the current information available on the Direct Line website.