The concept of an excess or deductible in auto insurance in Dominica refers to the predetermined amount that a policyholder is required to pay out of pocket before the insurance company covers the remaining costs of a claim.

This amount is agreed upon in the insurance policy and can be either a fixed dollar amount or a percentage of the total claim amount. This amount can be used to reduce your insurance premium payable.

The reason for having an excess or deductible in auto insurance is to share the risk between the policyholder and the insurer. By having an excess, the policyholder takes on a portion of the financial responsibility in the event of a claim, which can help reduce the overall premium cost of the insurance policy.

Additionally, having an excess or deductible helps prevent policyholders from making small or frivolous claims, as they are responsible for a portion of the costs. Ultimately, the excess or deductible in auto insurance serves to ensure that policyholders have a financial stake in their insurance coverage and helps keep insurance premiums affordable for all policyholders.