A leading insurance provider has revealed that the vast majority of British home owners are running the risk of their property being under insured. They should choose a policy provides cover for the full reinstatement value, said the insurer.
It is argued that property owners should obtain a professional valuation for insurance purposes. Any valuation provided by a bank or estate agency is unlikely to give a fair reflection of the cost of rebuilding a home.
Mike Colmans, a leading insurance expert, said, ‘having accurate sums insured on a property is vital to guarantee receiving the full amount in the event of a claim’.
‘As many as 50% of claims for damage to buildings are being settled below the cost of reinstatement, which could have a significant impact on property owners who would have to fund the difference themselves’, he continued.
The costs of rebuilding a property have remained relatively high, despite the fact that the average house price has been decreasing in recent times. There have been predictions that the costs of reinstating a property will increase further in 2010.
Mark Dunham, commercial property underwriting manager at the insurance company, said, ‘we have seen an increase in the number of properties that are underinsured during the recession but when money is tight and companies need to reduce costs it’s important that this is not at the expense of their insurance cover’.
In related news, it was recently revealed that 18% of British homeowners do not have cover for their contents.
Although it may be tempting to go without insurance in these financially testing times, the potential long term costs are devestating. It is best to look around at what is on offer on Home and Contents Insurance as the competitive nature of the market means that excellent deals can be obtained.