What Is An Insurance Excess?

December 02, 2019

An excess is the amount you pay to your insurer as a contribution to the cost of the damage or repairs in the event of an accident. The following scenario will help you understand how an excess works in car insurance.

John has gotten into a car accident and he is at fault. He makes a claim on his insurance policy with his insurer, ABC, and they charge him $1,500 – this amount is his excess.

The required payment of $1,500 is John’s contribution to the cost of repairing his car, while ABC will cover the rest. Generally, depending on your insurer, the excess must be paid at the point of claim or upon collection of your vehicle from the repairer, otherwise the claim cannot progress any further. Note that an excess can vary depending on the premium purchased. For this reason, customers have the option of paying a higher premium for a lower excess, and vice versa.

However, John cannot afford to pay $1,500 upfront. He needs more time to pay his excess. This is a common problem amongst Australians that prevents their claim from being processed -  but MoneyLoop provides the perfect solution.

If John applies for a MoneyLoop loan, we pay ABC $1,500 when they require it, and John can pay 5 interest-free instalments of $300 over a 2-month period as repayments to MoneyLoop. This way, we pay his insurer the total excess and John pays us in instalments, therefore we lessen the financial stress on the customer.


Now, he can afford to pay his excess through a simple digital payment solution and he can get back on the road sooner.

Read more about how MoneyLoop is helping more Australians every day here