Excess - Definition and Overview

In an insurance policy, the deductible or excess is the portion of any claim that is not covered by the insurance provider. It is normally quoted as a fixed amount and is a part of most policies covering losses to the policy holder.

In a typical automobile insurance policy, a deductible will apply to claims arising from damage to or loss of the policy holder's own vehicle, whether this damage/loss is caused by accidents for which the holder is responsible, vandalism or theft. Third-party liability coverage generally has no deductible, since the third party will likely attempt to recover any loss, however small, for which the policy holder is liable.