If someone files a claim against you after an accident, your insurance provider will cover the excess. If it's a personal claim, however, then you'll need to contribute the excess agreed when you took out the policy.
While it might be tempting to set your excess high when taking out insurance in order to get a better deal, it's important the figure is a realistic one – in other words, you need to be sure you'll have that amount of money to pay in the event of a personal claim.