What Is “Excess” in Car Insurance Policies

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Introduction

Ever made an insurance claim and were told you still need to pay a small amount even though you already have full coverage?
That’s what’s called an “excess”in car insurance, a portion of the repair cost that you must pay out of pocket before your insurer covers the rest.

Many policyholders overlook this when purchasing insurance, only to feel the sting later when an accident happens.

1. What Does “Excess” Mean in Car Insurance?

“Excess” refers to the self-contribution amount the policyholder must pay each time they make certain types of claims.
It acts as a risk-sharing mechanism between you and the insurer.

Example:
If your policy has an excess of RM400 and your car repair costs RM2,000:

You pay RM400
The insurance company pays the remaining RM1,600

The amount of excess varies based on your insurer, vehicle type, and cause of the accident.

2. Common Types of Excess

There are several types of excess that usually appear in your policy:

Standard Excess

The basic amount charged for every claim, usually between RM200 – RM400 depending on the insurer.

Compulsory Excess

Applied in specific situations such as:

The driver is under 21 years old
The driver holds a probationary (P) or less than 2 years’ license
The driver is not named in the policy

This is typically an additional RM400 on top of the standard excess.

Voluntary Excess

This is an optional excess amount you can set yourself when buying the policy.
The higher the voluntary excess you choose, the lower your annual premium — but you’ll pay more out of pocket during a claim.

3. When Does Excess Apply?

You’ll be charged excess when:

Making an Own Damage claim (repairs for your own car)
The driver involved in the accident is not listed in the policy
The case is still under investigation and fault hasn’t been determined

However, excess does not apply to:

Third-party claims
Fire or theft claims (if covered under your policy)

4. How to Avoid or Reduce Excess Charges

To avoid unpleasant surprises during a claim, you can:

List all regular drivers in your policy.
Review the excess terms before buying or renewing your insurance.
Compare policies on BJAK.my to see which insurers offer lower or more flexible excess options.
Choose a reasonable voluntary excess — low enough to handle in case of an accident, but enough to save on premium costs.

5. Real-Life Example

Imagine you have a comprehensive policy listing only yourself as the driver.
One day, your younger brother drives your car and gets into an accident.

In this case:

Your car is still covered.
But you’ll be charged a compulsory excess of RM400.
If the total repair cost is RM5,000, your insurer pays RM4,600, and you cover RM400 yourself.

Conclusion

Even though it might seem minor, excess can make a big difference when an accident happens.
Before buying or renewing your policy, check the excess details through BJAK.my so you’ll know exactly how much you’re covered for — and won’t be caught off guard when it’s time to claim.