Wilby Ltd's Mark Dalton warns of under-insurance risks
Aug 3 2010 by Henryk Zientek, Huddersfield Daily Examiner
BUSINESSES may be putting themselves at risk of facing huge costs by not insuring their properties to the full reinstatement value, according to a survey by a leading insurer.
The survey found that more than 77% of properties were under-insured with an average increase to sum insured required of about 55%.
This degree of under-insurance could be devastating to a business in the event of a major claim such as a fire.
If the sum insured is too low then an insurance policy may not provide enough money to rebuild the property.
This could leave a business in a critical condition especially given the current economic climate.
The recession has led to significant reductions in the market value of buildings.
This has led to some property owners questioning whether there has been a similar reduction in reinstatement values and whether building sums insured should be similarly reduced.
However, while property owners may be looking for savings in these troubled times, it is important that this is not at the expense of insurance cover.
They should consider a valuation immediately as they may not have sufficient reserves to deal with the consequences of under-insurance.
A professional valuation carried out on a property will ensure it is valued for the correct amount. Often valuations are undertaken for bank or sale purposes and these may not accurately reflect the total cost of rebuilding a property.
Some insurers have agreements in place with valuation suppliers to offer discounted rates for their customers meaning they could provide a good first point of contact for businesses looking to properly value their property.
For further information about how to ensure your buildings are adequately insured or for further information on this topic please contact us now on 01422 358 525 or email firstname.lastname@example.org