{"id":848751,"date":"2026-01-26T07:42:01","date_gmt":"2026-01-26T05:42:01","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=848751"},"modified":"2026-01-26T08:17:39","modified_gmt":"2026-01-26T06:17:39","slug":"how-insurance-claim-excesses-affect-your-pocket","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/industry-news\/848751\/how-insurance-claim-excesses-affect-your-pocket\/","title":{"rendered":"How insurance claim excesses affect your pocket"},"content":{"rendered":"\n

Making an informed choice could save you thousands<\/strong><\/h2>\n\n\n\n

Using car insurance as an example, an excess is a standard amount that you need to pay when your insurer settles your claim. It serves to motivate clients to drive responsibly and to refrain from submitting small, petty claims. <\/p>\n\n\n\n

Depending on your choice of insurer, your insurance excess<\/strong><\/a> could either be a fixed amount or a percentage of the final claim amount. In some instances, you may need to pay an additional excess on top of your basic excess amount. Here\u2019s what you need to know:<\/p>\n\n\n\n

What is a claim excess in insurance?<\/strong><\/h2>\n\n\n\n

In simple terms, a car insurance claim excess refers to the out-of-pocket payment you will need to pay when your car insurance claim is settled. <\/p>\n\n\n\n

You will usually pay the specified amount directly to the service provider before<\/em> they will start with the repairs to the vehicle. Your insurer will settle the outstanding amount directly with the service provider.<\/p>\n\n\n\n

Let\u2019s assume you\u2019re in a car accident and the damage to your vehicle amounts to R30 000 and your basic vehicle excess is R4 000. <\/p>\n\n\n\n

Your insurer will appoint a panel beater to fix the damage to your vehicle. When you take your vehicle to the panel beater to get fixed, you will pay R4 000 directly to the panel beater whereafter your car will be booked in. <\/p>\n\n\n\n

Your insurer will pay the remainder of the cost (R26,000) to the service provider.<\/p>\n\n\n\n

Fixed excesses vs. percentage-based excesses<\/strong><\/h2>\n\n\n\n

A fixed excess amount means that you will always know exactly what your out-of-pocket payment will be in the event of a claim. One of South Africa\u2019s leading short-term insurers, OUTsurance, offers fixed excesses from the get-go. <\/p>\n\n\n\n

They believe that this is to the benefit of the client in that there will be no surprise comes claim stage: you will always pay the fixed amount, regardless of the value or type of claim.<\/p>\n\n\n\n

A percentage-based excess, on the other hand, relates to a set percentage (usually around 5-10%) of the claim amount. <\/p>\n\n\n\n

If, for example, your repair cost is R300 000, following a vehicle accident and your percentage-based excess is 10%, you will be liable for a cash payment of R30 000.<\/p>\n\n\n\n

Pitfalls of low vs. high excess amounts at sales stage<\/strong><\/h2>\n\n\n\n

Insurers often attract customers during the sales process by offering policies with high excess amounts<\/strong>. This strategy lowers the monthly premium, making the deal appear very appealing upfront.<\/p>\n\n\n\n

However, the downside becomes clear at claims stage<\/strong>: before any repairs can begin, the high excess must be paid in cash to the panel beater. For many, this unexpected cost can be a major shock\u2014sometimes leaving them unable to afford the repairs when an incident occurs.<\/p>\n\n\n\n

On the other hand, choosing a low excess amount<\/strong> at the sales stage typically means paying a slightly higher monthly premium. But when something goes wrong, the excess is minimal, and the insurer handles the claim without placing a heavy financial burden on you.<\/p>\n\n\n\n

Not yet a client? Get a quote from OUTsurance<\/strong><\/h2>\n\n\n