Buildings should always be insured for the amount it would cost to rebuild them. However, 80% of commercial properties in the UK are underinsured*.
So you can feel confident you’ve got your sums insured right, we have teamed up with RebuildCostASSESSMENT.com who can offer you a reliable RICS approved, desktop Rebuild Cost Assessment to help guide you on how much you should be insuring your buildings for. This is a fantastic and affordable online service, saving you the hassle of having someone physically visit your property, which can be time-consuming and costly.
We also have a £20 discount code for you to use – simply enter the code MCCLARRONS20 when placing an order online.
We want to make sure you understand the potential consequences of underinsuring, so have provided an an overview of underinsurance and guidance on how to avoid it, below.
It’s a common mistake, but a costly one – determined by the ‘condition of average’ clause. This clause is the insurance term used when calculating the settlement for a claim where the policy undervalues the sum insured. In the event of a loss, the amount paid out for a claim will be in the same proportion as the value of the underinsurance.
For example, if you have insured your buildings at £200,000 and following a loss they are valued at £200,000, there is no issue. However, if you’ve insured your buildings for £100,000 and the actual value is £200,000, you have underinsured by 50%. This means, should you suffer a loss of £100,000 you would receive a claims settlement of only £50,000. The below shows how a payout is calculated by insurers.
Payout = Claim x Sum Insured/Actual Value
Payout = 100,000 x 100,000/200,000
Payout = 50,000
Here, in the event of a claim, any settlement calculated on the insured value will be halved by your insurer, leaving you with only £50,000 paid out.
Given the statistics, it is highly likely you are either paying too much for your cover or even worse, are facing a significantly reduced payout in the event of a claim. Don’t put your property at risk, it’s an avoidable issue which we have a simple solution for. You may be surprised at just how little it costs to increase your sum insured.
Protect your property from the potentially severe consequences of underinsurance by clicking here for a Rebuild Cost Assessment. Don’t forget to use the discount code MCCLARRONS20.
For any queries about your building insurance, contact McClarrons on 01653 697055 or by emailing firstname.lastname@example.org.