Will your claim be cut for under-insurance?
If your sum insured is lower than the real value, a policy with an average clause pays only the same share of every claim.
How do UAE wordings apply the average clause?
| Rule | What it means |
|---|---|
| Reduced in proportion | The claim is cut in the same proportion as the sum insured falls short of the value. GIG Gulf and QIC wordings. |
| Reduced only past a margin | The claim is cut in proportion only if the value is more than the sum insured by the margin. Liva’s wording uses 25%. |
| First loss, no reduction | The claim is paid up to the sum insured without a cut. GIG Gulf uses this for contents insured for AED 350,000 or less. |
Worked example
Contents worth AED 200,000 insured for AED 100,000, with a loss of AED 40,000 and no excess, under a proportional clause:
- You insured AED 100,000 of AED 200,000, which is 50%.
- The insurer pays 50% of the AED 40,000 loss: AED 20,000.
This calculator takes the excess off after the cut. Ask your insurer which order it uses. The rules and the wording quotes are on under-insurance and the average clause.
Sources
- Home Comfort, policy handbook and terms and conditionsGIG Gulf. Read 12 November 2026.
- Home All Risks Insurance Policy WordingQIC. File uploaded January 2016. Read 12 November 2026.
- Home Insurance Policy WordingLiva Insurance. Version 3.0, 15 October 2026. Read 12 November 2026.