What is average (in insurance)?

This is a policy condition that requires the amount of a claim payment to be reduced proportionality if you have not insured for the full value or the replacement cost.

For example, if you insure your business premises for £100,000 and the real value is £200,000, you will have only insured it for 50% of the real value. If you later need to claim for damage for worth £10,000, your insurer will only pay you for the proportion of the loss that the insurer has insured – which is 50% and £5,000 in this example.

Add Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: