Why do I need to insure my property at full replacement value?

If you insure your home for less than the full replacement value, in the event of a partial loss you would be subjected to the CONDITION OF AVERAGE. Under this condition if you have a claim for partial loss, what you would receive from the Insurance Company would be the same percentage of your loss as your sum insured is to the full replacement value, minus any excesses that are applied under this policy. E.g. your sum insured is 50% of the replacement value, you would be paid 50% of the loss, minus the excess.