There are two main kinds of policies: one which covers the excess on a single underlying policy (e.g. a car excess insurance policy) and one which covers the excesses across a range of underlying policies all in one go. The second type is sometimes called a “lifestyle” excess policy, and will generally cover excesses on your car, home, travel, pet and medical insurance policies all in one go.
The way it works is that you buy the excess cover either at the same time as your underlying policy, or at some other point in the year. If you claim on your underlying policy, you pay your excess as normal, and then use your excess insurance policy to reclaim the excess you have paid, up to a pre-agreed limit.
You decide on this limit when you buy the excess insurance - policies tend to offer limits from £250 for the year to £750 or more. The higher the limit, the more expensive the excess insurance policy, but the more excesses you will be able to claim during the year of the excess policy. For single policy excess insurance products, a higher limit will allow you to reclaim excesses on multiple claims during the year until you reach the limit; on lifestyle policies, a higher limit will allow you to reclaim excesses you pay on all qualifying underlying policies until your reach the limit.
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