It’s fashionable these days to say you’re not average. Every other advert, podcast and self-help guru bangs on about standing out from the crowd.  But in insurance, being average is something you definitely want to avoid especially when it appears in your policy wording.

The term “subject to average clause” is one of those little known conditions that only reveal themselves when it’s far too late, usually after something expensive has gone pop, bang, or burst into flames.

Here’s how it works:

Let’s say you insure your race car which is in storage for £10,000, but in reality, you know it’s worth £20,000.  The insurer, quite reasonably, expects you to be accurate, it’s your duty, it is called “utmost good faith”.  Let’s imagine you have theft or fire maybe and you make a claim for the loss of your race car, there is a very high risk that you won’t get the full amount of your sum insured.  Why? Well, if the Loss Adjuster finds evidence that you have knowingly underinsured (insured a £20k asset for £10k), they can rightly apply the Average Clause.  In this case, instead of getting the full amount, you’ll receive half of your sum insured, only £5,000.  That’s right, your payout is averaged down.

We have seen clients do it to save a few quid, others just don’t realise how values have crept up.  Either way, it’s a false economy.  It’s nothing personal. It’s your policy conditions, and if you are unaware, it can sting! 

When you’re average in life, it can be a blessing: you fit comfortably in any airline seat, your looks don’t turn heads for the wrong reasons, and your metabolism lets you enjoy a slice (or two) of cake without needing to train for a marathon afterwards.

But when it comes to insurance, being subject to average is something you’ll want to avoid. Talk to us at Lynx, where we make it our business to understand your needs and explain in plain English exactly how your policy works, right down to the fine print.