Motor Policy Excess Collected from Insured
Collecting the policy excess (deductible) from the insured before releasing the claim payment.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash in Bank (Excess Received) | Asset (+) | 500.00 | - |
| Claims Reserve (Gross Claim Reduced) | Liability (-) | 500.00 | - |
💡 Accountant's Note
The excess is the first amount of any claim borne by the insured. Collecting it reduces the net claim payment. The claims reserve should reflect the gross loss; the excess collection offsets part of the settlement.
Practitioner & Systems Framework
💻 ERP Architecture
The policy excess is recorded in the policy admin system against the policy and automatically applied in the claims management system when the claim is settled. The claims handler receives a notification to collect the excess before releasing the net payment. In direct repair programmes, the garage collects the excess from the insured on the insurer's behalf. Cash excess collections are posted in the AR or claims module and reconciled to the bank statement.
⚠️ Audit Flags
Auditors confirm that the excess amount matches the policy schedule — excess should not be waived without documented management approval. Test that the claims reserve reflects the gross loss (before deducting the excess) and that the excess is recorded as a separate collection, not as a reduction to the gross reserve at inception. Verify that excess collection is consistently applied — selective waiver of the excess can indicate fraud or a policy to improve customer satisfaction without appropriate approval.
📄 Required Documentation
Policy schedule confirming the excess amount, excess collection receipt, claims settlement calculation showing gross loss, excess deducted, and net payment, and bank deposit confirmation.
Automate this entry with the JEH Accounting Suite
Stop doing manual entry. Our VBA-powered ERP automatically generates your ledgers, Trial Balance, and Financial Statements.
No Subscriptions. Own your data.
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.