Underinsurance in Buildings and Contents Insurance Policies
With rising costs of standard living expenses come increased costs in other areas. You may notice your plumber, your electrician and your carpenter charging a little extra, they’ll be doing this to cover the increasing cost of materials and their own cost of living expenses.
These increases have a knock on effect to the cost of repairing or rebuilding your property which in turn will have an effect on your Buildings and Contents Insurance. We all pay for Buildings and Contents Insurance to cover us against worst case scenarios, a break in, flood damage, subsidence etc, but how much do you insure for? The insurance companies will ask for the sums insured, the value that it will cost to rebuild your home in the event it needs to be and/or the cost of replacing all your contents and valuables. Recent studies have shown that most of us do not know the correct rebuild value of our home; in fact, most of us underestimate by a considerable amount.
What effect does underinsurance have? Well, you will pay less for your Buildings and Contents Insurance because the lower the rebuild value of your property, the lower the premium charged is likely to be. But, if you make a claim against your Buildings and Contents Insurance when you have underinsured you are most likely to find that all of your claim will not be paid. Most Buildings and Contents Insurers have an “Average Clause” built in to most property insurance policies, this means that the percentage difference between your declared rebuild value and the correct rebuild value, is the percentage less they will pay of your claim.
Having scourged the internet there are numerous sites offering guidance for Buildings and Contents Insurance but one of the favourites remain as being www.cover4letproperty.co.uk. They are UK based and specialise in Buy to Let Landlord Insurance policies.
Their website provides a link at quotation that calculates your sums insured based on the square footage of your property and offers quotations from 6 Buildings and Contents Insurance companies and their Buildings and Contents Insurance premiums are offering great prices but with high levels of cover.