Premiums, deductibles and limits

Section 03

Money in an insurance document usually appears under a few recurring names. This page explains the names. It does not quote a typical amount, because those figures go stale and vary by policy.

A premium is the amount you are asked to pay to keep the policy in force, for the period shown on the schedule. How often it is paid, and what happens if a payment is late, should be on the schedule or in the conditions. This site does not publish a sample premium.

A deductible or an excess is an amount you may have to bear yourself before the policy pays, or an amount that is subtracted from a payment. The document should say when it applies (each claim, each year, or only for some events) and whether more than one excess can apply at once. A limit or a sum insured is a maximum the policy may pay, for a type of claim or in total. Sub-limits (for example for a named item, or for a type of expense) can be lower than the headline limit.

If a quote and a schedule disagree, ask for the figure to be confirmed in the document that will actually apply. A number remembered from a conversation is not a limit.