3 min read · Updated . Reviewed by James Rock (National Partnerships Director).
On this page 10
- What is an insurance excess?
- How does an excess work on an equipment claim?
- What’s the difference between an excess and a premium?
- Can there be different excesses for different claims?
- Should you choose a higher or lower excess?
- When might you pay more than one excess?
- Can you get your excess back?
- What should you check in the policy wording?
- How does an excess interact with equipment finance?
- Want to see the excess before you commit?
What is an insurance excess?
An insurance excess is the amount of an insurance claim you pay yourself. The amount is specified in the insurance policy. The insurer pays the rest of an accepted claim, up to the limits in the policy.
How does an excess work on an equipment claim?
| Illustration: accepted claim | Excess | You pay | Insurer pays |
|---|---|---|---|
| $1,500 of damage | $2,000 | $1,500 | $0 |
| $30,000 of damage | $2,000 | $2,000 | $28,000 |
| $120,000 of damage | $2,000 | $2,000 | $118,000 |
Illustrations only, using a $2,000 excess. These aren’t EquipCover’s excesses: yours is in the policy wording. The first row is why small claims are often not worth making: if the damage is less than the excess, the insurer pays nothing.
What’s the difference between an excess and a premium?
The premium is what you pay for the policy. The excess is what you pay towards a claim. On a fixed multi-year policy the premium is set for the term, so a claim costs you the excess, not a higher premium at the next renewal.
Can there be different excesses for different claims?
Yes. Some policies set different excesses for different events, such as theft, damage or breakdown, or for certain machines. The policy wording lists each one.
Should you choose a higher or lower excess?
Where a policy lets you choose, the trade-off is simple. Moneysmart puts it plainly: “Increasing your excess will also reduce your premium.” Its warning matters just as much: “remember that you will need to be able to pay the excess if you make a claim.”
For a financed machine, think about the month a claim lands. The finance repayment is still due, and the excess comes out of the same cash. Whether you can choose an excess, and the options, are in the policy wording and the e-brochure that comes with your indication.
When might you pay more than one excess?
The Financial Rights Legal Centre lists three common reasons:
- You’re claiming for more than one incident: “an excess is paid per incident”.
- You’re claiming under two different policies.
- Your policy has a basic excess plus additional excesses for specific situations.
For a business with several machines, that first point is the one to watch: two machines damaged in two separate incidents usually means two excesses.
Can you get your excess back?
Sometimes. If someone else caused the damage, “the insurer can recover damages from the at-fault driver, and can refund the excess to you”, as the Financial Rights Legal Centre puts it. It warns that this may not happen if the insurer decides chasing the other party isn’t worth the cost. The policy wording sets out when an excess is refunded.
What should you check in the policy wording?
- The excess amount for each type of claim.
- Whether the excess applies per claim or per event.
- Whether any excess applies to particular machines or attachments.
- What you need to do to make a claim, and how quickly.
How does an excess interact with equipment finance?
Your finance repayments continue whatever happens to the machine. If it’s damaged, you pay the excess and the finance keeps running, so it’s worth knowing your excess before you sign, not after a claim.
Want to see the excess before you commit?
Get an insurance indication, then read the policy wording that comes with the e-brochure before you accept.
Get your insurance indication in about 90 seconds.
Frequently asked questions
What is an insurance excess?
The amount of a claim you pay yourself. The amount is specified in the insurance policy.
Will a claim increase my premium?
Not on a fixed multi-year policy. The premium is locked for the term and isn’t affected by claims.
Where do I find my excess?
In the policy wording. Read it before you accept the policy.
Do I pay an excess if the damage is less than the excess?
You pay the whole cost yourself, and the insurer pays nothing, because the damage doesn’t exceed the excess.
Can different claims have different excesses?
Yes, some policies set different excesses for different events or machines. The policy wording lists them.
Is it better to have a higher or lower excess?
A higher excess lowers the premium, but you need to be able to pay it when you claim. Where a policy lets you choose, pick an amount you could cover in the same month as a finance repayment.
Can I get my excess back?
Sometimes. If someone else was at fault, the insurer may recover the cost from them and refund your excess. The policy wording says when an excess is refunded.
Sources
- Moneysmart (ASIC): Excess, glossary definition
- Moneysmart (ASIC): How to save money on car insurance (updated 10 August 2026)
- Financial Rights Legal Centre: Paying insurance excess (updated November 2023)
- Product information and approved item list from our specialist insurance partner (August 2026)
General information only, not personal advice. Read the policy wording before you buy.
