22nd January, 2021
Blog, Risk Perspectives
Don’t be a victim of under insurance…
Obtaining any form of insurance cover is such an easy process nowadays. Just open up the laptop, sign on to your favourite aggregator site, answer a couple of straightforward questions and the policy is yours and your cuddly animated animal will follow in the post. Simples!
But is that really the best method? Sometimes taking a little more care and effort may save you a lot of heartache, not to mention cost, further along the line.
Data from rebuildcostsASSESSMENT, a web based insurer, reveals that currently that there is a massive shortfall in cover, with properties said to be under insured across the UK by a massive £325 billion with 79% of UK properties said to be under insured, with on average buildings only being covered for up to 69% of their true sum.
So what exactly is under insurance? Put simply, when you key your details into a web site you are required to explain the rebuild cost of the property and the value of its contents that you want to insure. Guess those figures incorrectly and you create a discrepancy between the value of the property and the sum insured meaning that the rebuild cost of the property is actually higher than the sum you insure it for, you are then entering the realms of under insurance. Become under insured and you very quickly find out that you may not be paid the full value for any claim you submit…
Let’s take an example:
A policyholder insures their home and contents for £200,000
They make a claim for £50,000 following a fire
The insurer assesses the total value of the home and contents to be £250,000
Therefore the original policy was only for 80% of the actual value.
The payment made by the insurer therefore, will only be 80% of the total £50,000 which is £40,000
Whether you are a homeowner or a property owner, now is not the time for anyone to discover their insurance policy won’t pay out the amount they are expecting. This is a UK wide problem and it can only be resolved by people and businesses being guided correctly. Unfortunately that guidance is not provided by our furry friend on a quick and easy website. We work closely with various insurers and companies to safeguard against under insurance, making sure that it cannot happen to you and ensuring that your buildings are always insured for the right amount and would be happy to pass that guidance on.
Please don’t become a statistic of under insurance with your only consolation being a cuddly toy.