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 Payout = (Insured Value/Actual Value) × 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