The Average Clause:
If you have under insured yourself this will result in Average being applied to your policy. The Average Clause reasons that if you have under insured
yourself, you have taken a portion of the risk on for yourself and have “self-insured” it. Thus at claims stage you will only be paid out a rateable
portion of the claim.
For example: Should you insure your building for R500 000 but it should actually be insured for a R1 000 000, and your claim is for R200 000. Then you
will be paid out R100 000 as you are 50% under insured.
This information has been provided by Cindy Alfino, Insurance Authorised Representative – FSP 23418. For more information please use the contact form
or email email@example.com.