Getting insured values wrong under the Insurance Act 2015: can insurers avoid the policy, apply average or even ‘double-dip’ with proportionate remedies?

Property and business interruption insurance policies commonly include an average clause permitting the insurer proportionately to reduce the value of the claim for underinsurance. The Insurance Act 2015 provides the insurer with proportionate remedies for breach of the duty of fair presentation, including a right to reduce claims if it would have charged a higher premium.

So what remedies would an insurer have under the Act in the event of underinsurance: could it avoid the policy, apply average or even ‘double dip’ by applying average and then proportionately reducing the claim again under the Act? Read our briefing for more detail.

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