Data suggests that 8 out of 10 buildings are only insured for 60% of what they should be.
Research indicates that around 90% of buildings in the UK are insured for the wrong amount. Whilst some may be insured for too much, most are under-insured. In fact, data suggests that 8 out of 10 buildings are only insured for 60% of what they should be. If your home or business is under-insured you may not feel the consequences until you need to make a claim, when it is too late.
Saving money and cutting costs is most likely at the forefront of most peoples’ minds right now. But insuring your property for a lower sum insured than you need can leave you at risk of being substantially out of pocket if you need to make even a relatively small claim.
It has been reported that some goods and materials have increased in value by more than 50%!
Your buildings and contents should be insured to cover the cost to rebuild your property from scratch and replace all of its contents. It has been reported that some goods and materials have increased in value by more than 50%! Coupled with rising inflation over the past few years, the risk of under-insurance is especially high at the moment.
Why?
Covid-19, Brexit, the war in Ukraine, the energy crisis and the cost of living increases have all had a major impact not only on the cost of construction, materials, parts and labour, but also on the time it is taking for parts to arrive and for workforce to be brought in to complete the repairs.
If you take out a policy with less cover than you need, the amount you can claim for may be proportionately less than the cost of repairs or replacement.
Here is an example: –
Reassess your sum insured
Your sum insured should be reviewed regularly (at least every three years), and if you have made improvements to your home such as new windows, a loft conversion, or a new kitchen or bathroom, these should be taken into consideration, as well as the potentially rising cost to replace your contents.
If your home or business is under-insured you may not feel the consequences until you need to make a claim.
If you would like guidance on how to check if you have the correct level of cover for your home or business, Alexander Swan is currently offering a FREE, no obligation insurance health check. Click here to arrange an appointment.
