Briefly describe the following: Doctrine of Average.

The doctrine of average: The doctrine of average - or average clause is always applied in indemnity policies - primarily in property claims - fire and engineering. At the time of taking the policy the insured has to consider the value of the risk or subject matter of insurance-sum insured. He must ensure that the adequate value has been declared and insured. If, at the time of loss, it is found that the sum insured is less than the actual value of the subject matter, then the proportionate or rateable portion of the claims would be payable. The insured would therefore be his own insurer for the difference.