What Happens if I am Under Insured on my home insurance policy?
It is up to you to make sure the amounts you are insured for represent the Full Value of your property. This article will help guide you, assisting you in understanding whether your home is under insured.
Full Value : means the full cost of rebuilding if the buildings were completely destroyed. You also need to think about any extra costs involved in rebuilding, such as demolition, removal of debris costs, reconstruction, VAT, architects fees, surveyor’s fees and local authority planning. (See your own specific policy for a full definition).
The rebuilding cost could be higher than the market value (for example, if the property is built from stone which is no longer available locally or if it includes period or special architectural features). The rebuilding cost could also be lower than the market value.
How can I work out the rebuilding cost of my home ?
- The only way to be 100% sure is to pay for a professional report. You can ask a qualified surveyor or a building contractor or even an Estate Agent as an example to work out the cost of rebuilding your home. However, we do appreciate these do come at a certain costs.
- Alternatively there are online calculators that can help in determining your sums insured. There is abi.bcis.co.uk or http://www.rics.org/uk/knowledge/bcis/about-bcis/rebuilding/bcis-house-rebuilding-cost-index/
Please note we are NOT recommending these websites. These are two industry sites we are aware of. Whilst these sites can help in determining your sums insured, they are not a substitute for a professional report. For example these websites may not be suitable if your property has special design features or is not of standard build.
Please note we at Deeside Insurance can never advise or comment on your specific sums insured. All our customer homes are different. We are not professionals in respect of rebuild costs and have no knowledge on how to calculate your own specific sums insured.
We can never recommend to you to decrease your sums insured and we cannot recommend to you to increase your sums insured. This responsibility of calculating your sums insured rests entirely with you.
It is up to you to ensure that the sum insured is adequate in all cases.
Failure to insure for the correct sum could result in a claim being reduced or even, in extreme circumstances your insurance policy being voided.
When you come to make a claim, if the sums insured are not sufficient to pay the full cost of rebuilding your property, your claim may not be met in full.
Additionally – do not forget to regularly check that your sum insured is high enough as rebuilding costs are likely to go up over time.
The rebuilding cost has nothing at all to do with the market value of the property. If you have just purchased the property then a surveyor should have provided you with a recommended cost.
If you have had the property insured for several years then your current insurance company will have done its best to ensure that the sum you insure is adequate – to assure you. But if you are unsure then you should obtain a new professional report. We do not guarantee that the sum another insurance company has used is correct or adequate.
With regards to the contents of your home and the sums insured here, again the responsibility to make sure the amounts represent the full costs of replacing all your contents is yours.
You should be taking into account the costs of buying new items, their size, form and style at today’s prices. We also recommend that you review the value of your home contents on a regular basis.
Obtain professional valuations where required. This could be a policy condition of your insurer.
Some helpful hints we can give you is to take photographs or video of your home and keep receipts in the event of a claim. Go around your home room by room and list all the contents on an excel table and price the replacement costs accordingly.
All our customers are different and we at Deeside Insurance can never advise you on a “typical” or “average” sums insured for contents. We can also never recommend to you to increase your sums insured or decrease your contents sums insured as we do not know your home. Maybe for example you have a private collection of antiques or pictures.
It is up to you to ensure that the sum insured is adequate in all cases.
Failure to insure for the correct sum could result in a claim being reduced or even, in extreme circumstances your insurance policy being voided.
When you come to make a claim, if the sums insured are not sufficient to pay the full cost of rebuilding your property, your claim may not be met in full.
If you have any further questions or queries regarding your current home insurance or any other aspect of insurance we would be pleased to assist you in any way we can.
Once again “Thank You”, for your continued support and custom. We appreciate you have choices and we are always delighted when you choose us to take care of your home insurance requirements.
