Deductible vs.

Excess
An excess can refer to one of two very different insurance terms. The first is the extra costs borne by the insured over and above the maximum coverage that the insurance company pays. This terminology is especially common in areas of insurance sensitive to loss (like liability insurance) and is addressed by the insurance market through excess line insurance companies through mechanisms like excess insurance, gap insurance, and umbrella insurance. The second is an insurance exception that is (often interchangeably but wrongly) referred to as an excess or a deductible. It is "the first amount of the claim which the insured has bear. If the insured has an excess of $500 and the total repair costs $3,000, then the insured has to pay $500 while the [2] insurer pays the remaining $2,500.". The main difference is as follows. An excess is an amount a policyholder must bear before the liability passes to the insurer (subject to the sum insured). A deductible is an amount withheld by the insurer from the claim amount paid to the policyholder. The effect of an excess or deductible are the same if the claim amount is fully covered, but differ when the claim amount exceeds that maximum insured value. Consider, for example of a claim made for a $5500 medical bill on a policy with a maximum payable of $5000 in that clause. Case 1: Policy includes a $100 excess. Initial cost to holder: $100. Payable from company: $5000 (maximum payable from remaining $5400 claim). Case 2: Policy includes a $100 deductible. No initial cost to holder. Payable from company: $4900 (maximum payable of $5000 minus deductible of $100)

Though a single policy can theoretically have both an excess (a first pay) and a deductible (the withheld amount), this is not common, as the insurance company uses both clauses for the same reason (i.e. preventing frequent low cost or frivolous claims).