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What is underinsurance?

When purchasing insurance the premium is calculated on the buyer’s individual circumstances and the amount of cover they decide to take out to protect their business. 
 
Underinsurance happens when the correct amount of insurance hasn’t been taken out. 
 
There are several factors that can affect how much insurance a buyer needs, and if there is any uncertainty, this is where the advice from an insurance broker can be invaluable. If the level of cover proves to be too low, the insured could face large financial losses when making a claim.
 
It is not a surprise that when looking into how big the problem is that specialist valuer, Barrett Corp & Harrington, says that on average 77% of the properties they survey are underinsured by 45% of the correct insurance.*
 
What to look out for?
  • If the property is listed
  • If the building is made of stone
  • If the building was constructed before 1920
  • If the building has never had a valuation or it’s been more than 10 years
  • If the building is eco-friendly
  • If the building has recently altered
  • If the building Is in a funny location
  • If the building has been ‘souped-up’
  • If the building has extensive external features
  • If the building’s value has been based on a developer’s costs
  • If the building’s sum insured has been based on market value
How can I protect myself?
Make sure you make your insurance broker aware of any changes to your business, and if you need further guidance, don’t be afraid to ask for professional help. 
 
What next?
If you are unsure or believe that your property may be uninsured, give us a call now on 01789 761 660 and have a chat with us.
 
*Source: 
 
 

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