Every travel policy carries an excess, the amount deducted before anything is paid. It looks like a minor term and it determines whether a policy is useful for the losses a traveller actually suffers.
The excess exists to remove small claims
Handling any claim costs the insurer money in administration regardless of its size, and small claims are disproportionately expensive to process.
Setting an excess removes those cases from the system entirely, since a loss below the threshold is not worth submitting.
The saving is passed back through the premium, which is why policies with higher excesses are consistently cheaper for identical cover.
Per-section excesses multiply on one incident
Many policies apply the excess separately to each section that responds, rather than once per claim event.
A single incident that damages baggage, causes medical expenses and forces a curtailment can therefore attract three separate deductions from one set of circumstances.
Reading whether the excess is per section, per person or per claim is more informative than reading the headline figure, since the structure often matters more than the number.
Per-person excesses affect family policies
On a family or group policy the excess may apply to each traveller who claims, which changes the arithmetic when several people are affected by the same event.
A cancelled trip for a family of four can involve four deductions, materially reducing what is recovered from a single cancellation.
Some policies apply a single excess per event for a family, and where the option exists it is usually worth more than a small premium saving.
Zero-excess options are a priced trade
Policies offering no excess charge more for it, and the additional premium is calculated against the expected value of the claims that will now be submitted.
For a traveller who expects a large loss or none at all, the zero-excess option is poor value, since the excess is trivial against a substantial claim.
It makes more sense for people carrying moderately valuable equipment, where the likely claims are exactly the mid-sized ones an excess would otherwise absorb.
Choosing a level rather than accepting one
The sensible approach is to select the excess you could pay without difficulty and take the cheaper premium, rather than paying to remove a deduction you can comfortably meet.
Single-item limits sit alongside the excess and cap what any one possession can recover, so an expensive camera may be limited well below its value regardless of the excess chosen.
Excess structures, limits and terminology vary between insurers and jurisdictions, so the schedule attached to the specific policy is what governs rather than any general convention.