Under-Insurance

Some policies contain an under-insurance clause. This means that if you insure for less than the full value of the property, your claim may be reduced in proportion to the amount of the under-insurance. These clauses are also called “Co-Insurance” clauses.

A simple example is as follows:

$1,000,000 Full (Replacement) Value of building
$500,000 Sum Insured

Therefore, you would be self-insured for 50% of the Full Value

$100,000 Amount of Claim
$50,000 Amount payable by Insurers as a result of the application of Average/Co-Insurance (i.e.: 50%)  

Please watch this short one minute video for more information regarding under-insurance.

QUESTIONS?

If you’re still unsure please feel free to contact our office and one of our friendly staff will be able to help you. Alternatively, send us an email and will respond at our earliest convenience.

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T: 1300 887 911
E: sales@ajbinsurance.com.au