Excess: is it worth it?

An excess (Selbstbeteiligung) often lowers the premium but increases your costs when you make a claim. What matters are the premium difference, how often claims might occur and a sufficient cash reserve.

The calculation behind it

The calculator compares two variants of the same cover over five years. For each variant it adds up the premiums and, for the variant with an excess, adds the amounts you pay yourself in the assumed claim years. Without excess: annual premium × 5. With excess: annual premium × 5 + excess × claim years. The difference is the amount by which one variant works out cheaper over five years. That is all there is to it — and that is exactly why you can check the result on a sheet of paper.

The most common mistake: per claim, not per year

In most policy terms, the excess is agreed per claim, not per insurance year. Two claims in one year therefore usually mean paying the full excess twice. Our model simplifies this by applying one excess per assumed claim year. If you expect several claims, you should set the number of claim years correspondingly higher — in the calculator it stands in for the number of claims. Whether your policy has an annual cap on the excess is stated in the terms.

The limit is your savings, not the result

An excess is a bet that you can pay the amount out of your own pocket when it matters — immediately, not at the end of the month. If that would be difficult for you, the mathematical advantage is not an advantage but a deferred burden. A useful rule of thumb: only agree to an excess you could pay at any time without cancelling another contract or taking out a loan. The calculator does not know where that limit lies.

Car insurance works differently

In comprehensive car insurance (Kasko), it is not only the excess that matters but also being moved down in your no-claims discount (Schadenfreiheitsrabatt). A reported claim can raise the premium for several years, often considerably more than the excess itself. That is why many insurers show you from what amount it is worth reporting a claim at all, and offer no-claims protection (Rabattschutz). This effect is not included in our model. For car insurance, the result is therefore only half the answer — the downgrading table of your policy is part of it too.

• Excess per claim
• Downgrading of your no-claims discount
• Premium development over several years
• No-claims protection and what it costs

What the calculator does not know

The model only knows the four figures you enter. Policy benefits, future premium adjustments, cancellation by the insurer after a claim and your actual likelihood of a claim cannot be predicted. It is also essential that you compare equivalent offers. A low premium that comes from lower compensation limits rather than from the excess distorts the calculation completely. If you can, take the premium figures from two variants of the same policy.

• Same sum insured and perils
• Same compensation limits
• Same rules on gross negligence
• Only the excess differs