At the time of a loss, if the Sum Insured stated in your policy is less than the true replacement cost value of the property, the amount payable to you under the policy will be proportionately reduced. This is also known as the Condition of Average or Underinsurance.

For example, if your property is insured for 75% of the true replacement cost value, then your claim will be settled at 75% of the total amount claimed, less any applicable deductibles or excesses.

If the Sum Insured is too high, the claim settlement will be based on the correct replacement cost value and the policy Sum Insured going forward will be amended to reflect that correct value.