Under Insurance

Under Insurance


Is your property underinsured? If so it will be subject to average clause.

The term 'subject to average' means that if the sum insured at the time of a loss is less than the insurable value of the insured property, the amount claimed under the policy will be reduced in proportion to the under-insurance. Also called average clause.

If a policy of insurance covering a building has a sum insured of £80,000 and at the time of a loss the real insurance value is £100,000 then the proportion of Average  would be £80,000/£100,000 or 80%. You will only receive 80% of any loss you suffer.

If you think you may be underinsured seek advice asap.

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