Property Insurance - what can go wrong?

Underinsured?

A key issue is the importance of ensuring that the values you have given as your sums insured are adequate. If they are not, in the event of a claim, the 'average' condition applies - even if the under-insurance is unintentional. Under this condition, the amount paid by the insurer in the event of a claim is reduced in direct proportion to the degree of under insurance.

For example, if the cost of replacing your business contents is valued at £100,000 but you insure them for just £50,000, in the event of a claim, only 50% of your claim will be paid - even if the total value of the claim is less than £50,000. On the basis of this example, if you submit a claim for £30,000, only £15,000 will be paid.

 

The 'average' condition applies to partial losses only ie where the property is not totally lost or destroyed. Whilst it does not apply to total losses ie in the event that your premises or contents are totally destroyed, the most the insurer will pay is the sum insured.

 

Business Interruption

As a result of a fire at their premises, a manufacturing company moved temporarily to alternative premises to continue trading rather than risk losing their customers to their competitors.  The additional costs incurred in the move such as higher rent, additional wages and removal costs were paid for by the Insurer as part of the Business Interruption claim

These are only examples.  The circumstances of each claim vary and are subject to the terms and conditions of the policy wording

To talk to an expert in your area and get a quote.