Prevent financial setbacks in the event of damage to your home or its contents

If you suffer damage, your insurance company will compensate you. How much compensation you receive depends on the value. Are you insured for less than the actual value? Then you are underinsured. In that case, you will have to pay part of the costs yourself.

Contents Insurance

Contents insurance is all about the replacement value of your belongings: furniture, clothing, electronics, and other personal possessions. If the declared value is lower than what you actually own, you are underinsured. If your belongings are lost due to fire or theft, you will only receive a proportionate compensation. Insurers may also set conditions for reimbursing the full replacement value in case of damage.

How to Avoid Underinsurance for Your Contents Insurance

There are different ways to avoid underinsurance, depending on the insurer. Some insurers use an inventory list where you specify the exact value of your belongings. Others use a contents value calculator. With this tool, the insurer determines the value of your belongings after you answer a number of questions. The insurer then includes an additional clause in the policy, stating that they will not claim underinsurance in the event of damage. To maintain this guarantee, you must complete a new valuation every five years.

It is also increasingly common for insurers to work with a fixed insured amount. With this method, you are also never underinsured.

Valuable Possessions

Do you own valuable items such as jewelry or special possessions like art or antiques? Different rules often apply to compensation in such cases. You can take out additional insurance to cover these.

Buildings Insurance

With buildings insurance, you insure your home — the structure itself, not the contents. For buildings insurance, it is important to insure the correct rebuild value. This is the estimated amount needed to completely rebuild your house. This rebuild value is usually lower than the market value of your home because you don’t need to insure the land.

How to Avoid Underinsurance for Your Buildings Insurance

Buildings insurance also often uses a valuation tool, the so-called rebuild value calculator. By completing this, you receive a guarantee against underinsurance. Note: you must complete this again every five years. Some insurers offer a guarantee up to a maximum amount.

Other insurers may have different conditions for avoiding underinsurance, such as setting a maximum insured amount.

Have you made changes to your home, such as an extension or a dormer window? Always report this to keep your insured amount up to date.

Want to Know More?

Would you like to know if your insurance policies still suit your current situation? Or are you curious whether you might be underinsured?

Please contact us for personal advice — we are happy to help.