An excess is an amount of each and every claim which is not covered by the policy. It is used as an underwriting tool in order to minimise the number of small administratively expensive claims, or to reduce a loss ratio, and to impose a duty of care on the insured. Excess may be Voluntary and / or Compulsory. 

Example

You have lost your watch to the value of R800 and the excess applicable is R200. The claim will be settled for the amount of R600. A burst pipe results in damage of R375 to a ceiling and the excess applicable is R500. The full R375 would be for your own account because it falls within the excess of R500