What are household policies often subject to?

Household policies typically incorporate a structure where there may be either an overall excess that applies to all claims or differing levels of excess for various types of claims. This flexibility allows insurers to tailor the policy to address specific risks or types of coverage that the insured may want to prioritize. For example, a higher excess might be applied for theft while a lower excess may apply to damage from water leaks.

This system benefits insurers by managing claims and ensuring that both parties have a stake in minimizing small claims, thereby helping to keep premiums more reasonable. The concept of having tailored excesses reflects the diverse nature of household risks, where one single excess amount may not appropriately address all potential claims scenarios.

In contrast, policies without excess or with fixed excesses do not offer this level of customization. Automatic premium increases typically relate to changes in market conditions or the insurer's assessment of risks, but they are not inherent characteristics of household policies themselves related to claim excesses.