An excess is the first part of each insurance claim that is not covered by the insurance company. It is generally used in all car insurance policies and the excess represents the amount of each claim that the insured party will be personally responsible for.

Excess amounts will be specified and agreed on before the insured accept the policy document. In car insurance we find different excess amounts for different events or risks covered. For example the excess on a claim for replacement of a window or windscreen glass will not be the same as that of replacing a car radio. The insurer will deduct the excess from the amount they pay out towards a claim. Excess is also referred to as the first amount payable and is a form of self-insurance.

Insurance companies use excess as an underwriting tool to discourage the number of small claims that are administratively expensive. It is also done to enforce a sense of duty and care on the insured party. The normal excess is also called a compulsory excess. The insured has an option to increase the amount of the excess payable and this is referred to as a voluntary excess. The effect of a voluntary excess is a reduction in the amount of the monthly premium payable.