Insurance Glossary

Average (under-insurance)

Last reviewed 25 July 2026 · by the Savvy Insurance editorial team

What is average (under-insurance)?

'Average' is the clause insurers apply when you're under-insured: they reduce your payout in the same proportion that you under-insured. Insuring for full replacement value avoids it.

Example

Insured for half its value, the claim was cut by average to half the repair cost.

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