How to Read Your Insurance Excess Before You Make a Claim
When comparing car insurance, most drivers focus on premium price. But your insurance excess can also significantly affect your out-of-pocket cost when something actually happens.
This is the amount you pay before your insurer steps in to cover the rest of a claim.
What Is Insurance Excess?
Insurance excess is the portion of a claim you agree to pay. For example:
Repair cost: RM2,000
Excess: RM500
You pay: RM500
Insurer pays: RM1,500
This is why understanding excess is just as important as comparing premiums.
Types of Insurance Excess in Malaysia
Compulsory Excess
This is fixed by the insurer or policy terms. It may apply depending on your driver profile, claim type, or risk category.
Voluntary Excess
This is optional. You agree to pay more excess in exchange for a lower premium.
Understanding the difference between compulsory and voluntary excess in Malaysia helps you decide how much risk you're comfortable taking.
Do You Always Have to Pay Excess?
A common question is whether you need to pay an excess for a non-fault accident.
If the other driver is identified and at fault, you may be able to make an Own Damage Knock-for-Knock (OD-KFK) claim — also known as a no-fault own damage claim — instead of a standard own damage claim. This only applies to comprehensive policies, and your NCD is typically protected if you're eligible.
The short answer: it depends. Key factors include:
Whether the other driver can be identified
The type of claim and your insurer's specific rules
The exact terms and conditions in your policy
That's why it's essential to review your policy carefully before making a claim, so you know exactly where you stand and can avoid unexpected costs.
How to Check Your Excess Before a Claim
Before you proceed with a claim:
Review your policy document
Check the excess amount clearly
Understand when it applies
Compare the repair cost against the excess
Sometimes, if repair costs are low, paying out of pocket may make more sense than claiming your insurance.
Planning Your Total Car Cost
Excess is just one part of your total ownership cost. You should also consider:
Insurance premiums
Road tax
Car service and maintenance
Using an insurance calculator together with a road tax calculator gives you a clearer yearly picture.
How Drive+ Helps Reduce Overall Costs
Even though excess can't be avoided in some cases, you can reduce other expenses. PolicyStreet's Drive+ membership offers:
Road tax discount of up to RM120 (based on membership tier)
RM40 battery replacement voucher
These savings help offset unexpected costs like excess payments.
Explore our Terms and Conditions to find out the full benefits and perks.
Key Takeaway
Before making a claim:
Know your excess amount
Understand when it applies
Compare claiming vs. paying yourself
Plan your total costs, not just the premium
This helps you make smarter financial decisions as a driver.
Ready to compare your options? Compare car insurance plans on PolicyStreet.
Frequently Asked Questions
1. What is insurance excess in car insurance?
It is the amount you need to pay before your insurer covers the rest of your claim. This amount is stated in your policy and can vary depending on the terms.
2. What is the difference between compulsory and voluntary excess in Malaysia?
Compulsory excess is set by the insurer and must be paid under certain conditions. Voluntary excess is chosen by you to lower your premium but increases your out-of-pocket cost during a claim.
3. Do I have to pay extra for a no-fault accident?
Not always. If the other driver is identified and clearly at fault, you may be eligible for an Own Damage Knock-for-Knock (OD-KFK) claim on a comprehensive policy, which can let you avoid the usual excess and protect your NCD. Always confirm the exact terms with your insurer before proceeding with a claim.
4. Should I always claim if damage is minor?
Not necessarily. If the repair cost is close to or lower than your excess, it may be more practical to pay yourself instead of making a claim.
