DEFINITIONS & TERMINOLOGY
A
Average Clause: The 'average clause' is defined as a clause in an insurance policy requiring that you bear a proportion of any loss if your assets were insured for less than their full replacement value. This proportion is the amount for which the assets were under-insured, expressed as a percentage of their indemnity value at the time of the loss.
R
Replacement Cost: Is the substitution, usually of a building, by a new one which will conform to the size and the existing useful purpose which the old one serves. The cost to do this is replacement cost.
Reproduction Cost: Reproduction, as the word implies, is to recreate or duplicate an existing building by one which is the same in all details. The cost to do so is the reproduction cost.
Average Clause: The 'average clause' is defined as a clause in an insurance policy requiring that you bear a proportion of any loss if your assets were insured for less than their full replacement value. This proportion is the amount for which the assets were under-insured, expressed as a percentage of their indemnity value at the time of the loss.
R
Replacement Cost: Is the substitution, usually of a building, by a new one which will conform to the size and the existing useful purpose which the old one serves. The cost to do this is replacement cost.
Reproduction Cost: Reproduction, as the word implies, is to recreate or duplicate an existing building by one which is the same in all details. The cost to do so is the reproduction cost.