What amount is deducted from the claim due to the policy excess in Paul's case?

The amount deducted from the claim due to the policy excess represents the portion that the policyholder agrees to pay out-of-pocket before the insurance company begins to cover the remaining costs associated with a claim. In this scenario, choosing £1,000 signifies that this is the specified excess amount outlined in Paul's insurance policy. Therefore, if a claim arises, the insurer will deduct this £1,000 from the total loss amount before processing the payout.

Understanding the nature of policy excess is crucial in insurance, as it serves as a form of self-insurance intended to minimize small claims and encourages policyholders to avoid filing minor claims. By selecting the correct excess amount, it indicates familiarity with the terms of a typical insurance policy and how they affect claim settlements.