Underinsurance – Avoid underinsurance in 2022
Underinsurance continues to be a widespread and persistent problem throughout the United Kingdom. In fact, an estimated 40 per cent of businesses and 80 per cent of commercial properties are underinsured.
This occurs when a business has insufficient cover to meet its needs, whether that means its assets are valued and insured at less than their true value, its limit of indemnity is too low or its maximum indemnity period is too short.
Even though underinsurance is a common enough situation to find yourself in, there are steps that you can take to ensure that you begin 2022 with your best foot forward.
This involves scrutinising and updating all of your insurance policies with any changes and updating us accordingly.
Provide the cost of rebuilding the property (including the costs of demolition, materials and professional fees) to your broker rather than the market value or the amount you purchased it for.
Buildings should always be insured for the amount it would cost to rebuild them. However, fewer than one in ten commercial properties in the UK are covered correctly.
If you are over-insured you are probably paying too much for your buildings insurance. If you are under-insured, you face a reduced payout in the event of a claim. Insurance claims can be reduced by hundreds of thousands of pounds due to under-insurance.
What to do if you are concerned about being underinsured:
Getting someone to visit your property to carry out a professional assessment can be time-consuming and very expensive.
However, thanks to our partnership with RebuildCostASSESSMENT.com we can offer you a reliable low-cost service from a ‘Regulated by RICS’ (Royal Institution of Chartered Surveyors) organisation.
You’ll receive a comprehensive Rebuild Cost Assessment (RCA) report guiding you on how much you should insure your buildings for.
This is a fantastic and affordable online service which can protect your organisation from the potentially severe consequences of underinsurance.