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Underinsurance (average) calculator
If a client is underinsured, most commercial policies cut every claim in proportion — even small ones. Use this to show the effect.
See how average reduces a claim
Insured proportion
75%
Amount paid
£75,000
Client pays
£25,000
Before any excess. Some policies have no average or allow a margin (for example 15%). Always check the wording.
What is the average clause?
Average means the insurer pays the same share of a claim as the share of value that was insured. Insure £300,000 of property worth £400,000 (75%) and a £100,000 claim pays £75,000.
Why it matters even for small claims
Clients often think underinsurance only matters for a total loss. Average applies to partial losses too, which is why it causes so many complaints.
How to avoid it
- Get a proper rebuild cost valuation — try our rebuild cost calculator.
- Review stock and contents values at every renewal.
- Ask whether day-one reinstatement or an average margin is available.
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