Average Premium Clause Samples

The Average Premium clause defines how the insurance premium is calculated based on the average value of the insured property over a specified period, rather than a fixed sum. In practice, this means the insured must regularly report the value of their assets, and the premium is adjusted accordingly, often through periodic declarations or reconciliations at the end of the policy term. This clause ensures that the premium paid accurately reflects the actual risk exposure, preventing overpayment or underpayment and promoting fairness for both the insurer and the insured.