What happens if I am underinsured and make a home insurance claim? - What is Average?

 

Never under insure your home or your belongings the financial consequences are serious for you.

 

Typically if you have under insured your home then an insurer will apply the condition of average. This simply means that they will pay out only a percentage of the amount you have claimed for.

 

The percentage they pay out is the same percentage that you under-insured for.

 

For example if you have £50,000 of contents ion your home but choose to insure only £25000. In a claim for £10000 the loss adjuster may see that you are underinsured and apply average. This means that you were underinsured by 50% so the insurer has the right to only pay 50% of the claim.

 

Clearly it is worth insuring the full value of your buildings and content