Making sure you get the right pay-out
Have you ever heard of underinsurance and its consequences? Most buyers of insurance haven’t – until they come to make a claim on their property insurance and find that they were underinsured and don’t get full settlement for a claim they’ve made.
For example a property is insured for £1,000,000, but should have been insured for £3,000,000. A storm occurs damaging the roof, the cost to repair the roof is £200,000. The policyholder submits a claim but finds after a loss adjuster has visited the property, that they are underinsured by two thirds. The insurer offers to pay the sum of £66,680 less the excess £250, amounting to £66,430. The policyholder must then find the remaining sum, whether that be from money in savings, loan, overdraft or forced to sell the property. As I’m sure you’ll agree it would be a very frustrating situation to find yourself in!
In addition, the Building Cost Information Service (BCIS*) Index rose from 3.4% in May to 7.9% in June and to a slightly lower 6.7% in July. Making it more expensive to build, repair and or renovate property given the effects of the COVID-19 pandemic and lockdown. The problem is far wider reaching and applies to commercial and domestic property buildings, contents, plant and machinery and stock.
The good news is that as a Chartered Insurance Broker, I will look at your risks, evaluate the insurance requirements and provide guidance on the sum insured. I do this via a trusted network of insurance approved valuers, who supply a valuation known as Insurance Reinstatement Cost Assessment (IRCA). So, you know how much you should be insuring your property for and so giving you real peace of mind.
At the end of the day when we make a purchase, we want to know that the product was a good buy and will work when it’s called upon.
If you have questions regarding underinsurance, risk management or any other type of risk or insurance related issue, please feel free to contact me. Nick.taylorward@konsileo.com
*BCIS (Building Cost Information Service) by RICS (Royal Institute of Chartered Surveyors) on behalf of the ABI (Association of British Insurers).
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