NID
The Average Principle
Uncover how your claim payout is determined through a fair balance between your insured value and the actual value of your assets. This essential concept ensures that the insurer only covers the portion of risk that corresponds to your coverage. Explore our interactive calculator for a clear, step-by-step demonstration of how your claim is adjusted after a loss.
How does the average principle work?
This principle ensures that the insurer is only liable for the portion of the risk they were covering. It highlights the importance of ensuring that your insurance coverage matches the full replacement value of the insured items.
Claim Formula
Claim Payout = (Insured Value/Actual Value) x Damage - access amount
Example Breakdown
Given Values:
Insured Value: R800,000.00 of your movable Assets (Yourself)
Actual Value: R1,200,000.00 of your movable Assets (Accessor/Surveyor)
Damage/Loss Amount: R30,000.00 During a burglary, you lost your laptop.
Excess Amount: R1,000.00
(800,000/1,200,000) x 30,000 = Payout R 20,000.00 - R 1,000.00 = R19,000.00
Average Principle Calculator
Adjust the insured value, actual value, damage, and excess amount to see how the average principle affects a claim payout.
Estimated payout
R19,000.00R20,000.00 before excess, then R19,000.00 after excess.