Property underinsurance is a massive issue in the UK, with 82% of properties currently having insufficient protection according to a report by rebuildassesment.com. While that’s a hugely worrying national statistic, it’s impact only really hits home real when its applied to an individual property owner.
An underinsured property – particularly one that doesn’t have sufficient rebuild cost cover – leaves owners open to potential losses that could easily run into tens of thousands of pounds. What’s even more troubling is that avoiding this trap is as easy talking to your local insurance broker as this recent case study from Coversure Bedale illustrates.
It Pays To Listen To Good Advice…
Our property-owning couple have been with Coversure Bedale for many years and have come to trust franchise owner Mike Scanlan and his team to protect what matters to them. Over the years as their property insurance renewal date has drawn near, Mike has encouraged them to get their building sum insured valuation updated – the amount it will cost to rebuild a property in the event of a disaster. If this is incorrect, an insurer may only pay a percentage of the rebuilding costs in the event of a claim as the cover level is wrong, leaving the property owner with a bill that can easily run into the tens of thousands of pounds.
Mike has encouraged them to get their building sum insured professionally updated– this is the true amount it will cost to rebuild their property in the event of a disaster. If their building sum insured is incorrect, an insurer may only pay a reduced amount of the rebuilding costs in the event of a claim, leaving the property owner with a bill that could easily run into the tens of thousands of pounds. Despite this, their response has always been the same: that the property is worth around £220,000 and that’s what he’d like his cover based on.
Undeterred, this year Mike took a different tack and talked to the couple about a RebuildCost survey, a quick, easy and cost-effective way to get a correct building sum insured valuation. This they agreed to, reasoning that if nothing else it would make them feel comfortable with their current sum insured of £415, 849 (which they believed was more than enough) for a premium of £415.
To their surprise the rebuild cost came back at over £614,000 – nearly 50% more than they were currently insured for. When Mike sent the details over, however, their premium had only risen to £555 – a quote they were only too happy to accept.
And the Moral Of This Tale Is…
Well, there are two actually.
The first is make sure you get your building sum insured valuation updated on a regular basis. The fact that building sum insured valuations are too low is one of the main reasons why 82% of properties in the UK are underinsured. When completing property insurance quote forms, many property owners – be they landlords or those seeking home insurance – mistake the rebuild cost for the market value. They aren’t the same thing though and not knowing how much it would cost to rebuild leaves you running the risk of a huge bill should the worst come to the worst.
The second is when you are looking for property cover – be it for home, commercial or residential landlord insurance – talk to your local insurance broker. Someone like Mike at Coversure Bedale can arrange an up-to-date rebuild cost assessment to ensure you too can sleep easy. They later told Mike that while they were waiting for their revised valuation to come back, they’d actually discussed how they would cope if they were suddenly faced with a large or total loss claim. Their conclusion – doubtless like many others in their position – was that they’d have to get a fresh mortgage, a crying shame considering they had spent over 20 years paying their existing one off.
Having enjoyed such great service from Mike over the years, its little wonder that they’ve previously said the following of Mike:
“Having just renewed our insurance policy with Mike at Coversure I can honestly say that the service I received was second to none, our old insurer had let our old policy lapse and Mike worked quickly to find a very competitive quote, even saying that he wouldn’t leave the office until we were insured, you don’t get that sort of commitment and professionalism from businesses these days!! Mike as always was approachable and friendly; this is one insurance company that can’t do enough for you and are totally reliable.”
“I would recommend them to anyone wanting an insurance policy that you know is right for you and has been provided by the best in the area.”
Want To Avoid The Property Underinsurance Trap?
If you’d like to avoid the property underinsurance trap then please contact your local Coversure office today. With over 90 offices throughout the UK, a friendly helping hand is never far away and they can help you get the property cover you need. You can find your local Coversure office here.