Home insurance excess
Both buildings and contents home insurance policies include what is known as a 'policy excess', and this is the amount you have to pay if you make a claim. The insurer covers the remaining amount (within any upper limits stated in the policy).
If your policy excess is £90, for example, and you make a claim for stolen possessions with a value of £500, you would only receive £410 of this from your insurance provider (i.e. the total claim amount, minus your excess).
You can find out how much your excess is by looking at your Policy Schedule. When you're applying for home insurance, the excess amount will be one of the key things you need to bear in mind when comparing quotes from different providers.
Compulsory versus voluntary excess
On home insurance policies you will usually have a compulsory excess, which is applied to every claim you make.
Many insurers will offer you a discount on your premium if you agree to a further voluntary excess, because they will have to pay less towards the claim as a result. The voluntary excess could be any figure from £0 up to around £500. Obviously this means that in the event of a claim, you will have to cover a much larger chunk of the total yourself, but from month-to-month you will enjoy lower premiums.
It's also worth watching out for different excesses that may apply to particular types of claims such as accidental damage cover or subsidence claims – for these, the compulsory excess may be higher.