Definition of Insurance Terms

Sum Insured: This is the amount that you should be very careful to ensure that it will cover the cost to rebuild your property and is the basis of your Insurance contract.

Average Clause:  If at the time of a loss the property is insured for less than the full rebuild cost, then the Insured is responsible for the difference. In this event, the Insurer will only pay out a calculated portion of the rebuild cost and the balance will have to be found by the Insured.

Market Value: Market value is an opinion of what a property would sell for in an open competitive market.

Rebuild Cost:  This refers to the cost to completely rebuild your property if it was destroyed. This includes the cost to replace all the structures on the property inclusive of fences, walls, driveways, swimming pool, storage facilities, etc.