A fire policy containing an average clause is___________________
A)Valued policy
B)Average policy
C)Specific policy
D)Floating policy

Question

Quizplus · Accepted Answer

An average clause in a fire policy means that the policy is an Average Policy. This clause is used to encourage the policyholder to insure the property for an amount close to its actual value. If the property is underinsured at the time of loss, the claim payout is reduced in proportion to the underinsurance, encouraging policyholders to insure their property adequately.

A Fire Policy Containing an Average Clause Is___________________