What is the risk of underinsurance?
Underinsurance of buildings and contents can occur. The consequences of underinsurance are sometimes underestimated. We explain the risk of underinsurance and how to prevent it.
What is the danger of underinsurance?
Underinsurance means that the amount you are insured for is too low. The actual value of your home is higher than the amount you are insured for. What is the risk of underinsurance? When you have a claim, you will only receive a part of this claim. We will illustrate this with an example:
Suppose you have a building insurance for €150,000 and the reinstatement value is €300,000, then you are insured for 50% of the reinstatement value. In case of damage, you will only receive 50% of the damage amount, regardless of the damage amount.
What if I do not fill in a new rebuilding value meter?
If you do not fill in your new reinstatement value meter on time, the policy of your buildings insurance will remain unchanged. So you remain insured. However, you run the risk of underinsurance. In case of underinsurance, the insurer will not pay the full damage after a fire, burglary or leakage,for example .
Do you have questions or need help filling in the value meter? Then please contact us. We will be pleased to help you.
You can reach us on working days from 9.30-17.00 via the chat. Or from 08.00-18.00 on telephone number:
088 688 3711 AHOMELESS INSURANCE
How do I prevent underinsurance?
In order to calculate the value of your building properly, we use a reinstatement value meter. A properly and fully completed reinstatement value meter gives you the guarantee against underinsurance for five years. By means of a questionnaire, in combination with your family situation, income, age and the size of your house, an estimate is made of the value of the building. When you fill in this value meter truthfully and send it back, your insurer will give you a guarantee against underinsurance. If, in the event of a claim, the reinstatement value meter proves to be too low, the insurer will take on this risk. In this case the insurer will pay the full amount of the damage.
A reconstruction value meter must be completed every 5 years. In the meantime, changes may have been made to your house. Did you have a dormer installed, or did you extend your house with a conservatory? These kinds of changes can change the value of your house. That is why it is important that you determine the reinstatement value of your house again after 5 years.
Also with contents insurance, a contents value meter should be filled in every 5 years, in order to avoid the risk of underinsurance.
Property insurance premium may change
When you have filled in the reinstatement value meter, the insurer will consider whether the insured amount differs from what is already known. This may result in your premium being adjusted. In this case you will receive a new policy document by post from your insurer with the adjusted premium.
We can be reached via Chat, Whatsapp, phone or email
Please feel free to contact us if you would like to know more.
We are here today until 18:00