Are you under-insured?

For most of us, our home is our biggest asset, so it makes sense to ensure it is properly insured. The same applies to businesses – farms, estates, indeed any commercial building needs to have the right cover.

It sounds obvious but according to research by Barrett Corp & Harrington, Chartered Surveyors with expertise across the rural sector, more than 75% of all properties are only covered for around half the amount they should be.

Under-insurance is a common problem in household insurance but can equally arise in farms or estates and the consequences can be catastrophic for individuals or businesses.

How we can help

Your choice of insurance is likely to be based on a number of factors – price, coverage or service, for example. Getting the right sums insured is often complex and values can change quickly. A specialist broker can help you navigate the process to get insurance that protects you from risk at a competitive price. A broker is independent and depending on the product you require, can access different insurers to secure the most favourable terms on your behalf.

There are other specialists involved in the process, such as Chartered Surveyors, who carry out detailed assessments before valuing a property. Martyn Barret of Barrett Corp & Harrington adds, “The use of average prices to calculate insurance values can lead to significant shortfalls in cover. After all, most buildings are not ‘average’ and there is always something which will distinguish them”.

Ways to spot potential under-insurance 

  • A mortgage valuation is a mortgage valuation and not a bespoke insurance valuation.
  • The market value is the market value and the insurance value is totally unrelated.
  • Buildings are listed because they are of special architectural or historic interest. If there’s a fire or other loss, special permission from planning authorities and agencies will be needed for rebuilding or repairs, which will be more costly than reinstating a non listed building with similar functionality.
  • If a building is made from stone, it costs more to build, repair and maintain, especially if the stone is unique.
  • If a building has extensive outbuildings such as garages or storage sheds, these must be included, but are sometimes overlooked.
  • If a building has recently been extended or altered, you must ensure this is reflected in a revised value in the insurance policy.
  • Location is a factor. If adjacent to a railway line or only accessible via a weight restricted bridge, these will complicate the process and the cost of a rebuild.