Excess and Deductible in Ghana Insurance

The excess (also called the deductible) is the fixed amount you must pay from your own funds on every insurance claim before the insurer pays the remainder. Understanding your policy excess is essential — it directly affects both your premium and the value of your cover.

What is an excess in Ghana insurance?

The excess is your share of every claim. If your vehicle sustains GHS 8,000 of damage and your policy carries a GHS 1,000 excess, the insurer pays GHS 7,000 and you pay GHS 1,000.

Excess serves two purposes:

It reduces moral hazard — policyholders are less likely to make small, frivolous claims if they bear a cost

It lowers the insurer's administrative burden for small claims, which is reflected in lower premiums

Types of excess in Ghana insurance

There are two main types of excess used on Ghana insurance policies:

Compulsory excess — set by the insurer or the NIC tariff. Cannot be removed. For motor policies, the NIC tariff specifies a standard compulsory excess based on vehicle type and cover.

Voluntary excess — an additional excess chosen by the policyholder in exchange for a premium reduction. Common on motor comprehensive policies.

Motor insurance excess under the NIC Ghana tariff

For motor comprehensive policies in Ghana:

Private vehicles (X.1 / X.4): Standard compulsory excess applies per claim

Commercial vehicles: Higher excess applies given greater risk exposure

Excess buyback option: Pay an additional 10% loading (private) or 15% loading (commercial) to remove the excess from future claims — useful for clients who want first-loss cover

This excess buyback option is listed as "APPLICABLE" (standard excess) or "BOUGHT_BACK" (excess waived) on NIC-tariff quotations.

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Frequently asked questions

Does excess apply to every claim in Ghana?

Yes. The policy excess applies to every claim event. If you have GHS 800 excess and make two separate claims in a year, you pay GHS 800 on each claim.

Can I reduce my motor insurance excess in Ghana?

Yes. You can pay an additional loading (10% for private vehicles, 15% for commercial) to "buy back" the excess — meaning the insurer pays 100% of every valid claim from the first cedi.

Does the excess apply to Third Party Only motor insurance?

No. Third Party Only policies in Ghana do not carry an excess on third-party claims. The excess only applies to your own vehicle's damage under comprehensive and TPFT policies.