Average Clause

Please note that all Insurance policies are subject to the "Average Clause."  This means that in the event of a partial loss, your claim will be adjusted according to the portion that the Sum Insured bears to the Actual Value of your property.

For example,

Actual Value    $95,000.00

Sum Insured    $55,000.00

Partial Loss      $35,000.00

Amount Due To The Insured ($55,000.00 x $35,000.00)/$95,000.00 = $20,263.16

It is obvious that you would be at a disadvantage, therefore, we urge you to obtain a current valuation to confirm the true value of your property.

Adequacy of Sum Insured

Please check the adequacy of your Sum Insured to ensure that it reflects the true value of your property.  This will ensure that in the event of a loss or damage to your property the Average Clause will be inoperable and your claim settlement will be close to what you expect.

Therefore, insuring a property for an incorrect sum, will not yield the full coverage for the sum being insured when a liability occurs.  There is a difference between the Actual Value and the Sum Insured; Actual Value refers to the value of the property, whereas Sum Insured refers to the cover in an event of a claim.  In any event of a claim, there will be a variation in reimbursement amount depending on the loss.

Lastly, if any renovations or additions are made to your property, please notify us so that the necessary changes may be made to your insurance policy.