Consequences of being underinsured

Falcon Insurance

When was the last time you did a walk through and calculated how much it would cost to replace everything at the current market value?

Believe it or not 50% of businesses in the UK are underinsured.

Yes, you may save some £££’s on your premium, but if you don’t insure on the correct figures to rebuild and replace, could your business survive?

If a fire damages your property, causing repairs costing £100,000 and the building’s total declared reinstatement insurance value is £1 million – most owners assume they have more than adequate cover.

However, if the insurer can establish the actual cost to rebuild the property is £1.2 million they will tell you that you haven’t insured your full amount.

It reduces the claim via a ‘condition of average’ clause.

This mean that the claim will be reduced by the same proportion as the amount of ‘under’ insurance.

So, you would only get 83% of your claim. Which may not sound like a lot, but it’s £17,000 that you’re not getting.

Can you deal with that? What we recommend is making sure that you catalogue your contents and get a valuation done on your building.

Yes, it’ll cost you a few hundred £££ but what’s that compared to thousands?

Ring your insurer to get advice and support to ensure this doesn’t happen to you – could your business suffer from such a loss? 0121 679 7265