{"id":7470,"date":"2022-09-05T09:50:22","date_gmt":"2022-09-05T08:50:22","guid":{"rendered":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/?p=7470"},"modified":"2022-09-05T09:50:23","modified_gmt":"2022-09-05T08:50:23","slug":"your-underinsurance-jargon-buster","status":"publish","type":"post","link":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/blog\/your-underinsurance-jargon-buster\/","title":{"rendered":"Your underinsurance jargon buster"},"content":{"rendered":"\n
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Are you underinsured?<\/span><\/strong><\/p>\n<\/div>\n<\/div>\n

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Maybe there\u2019s a time and place for jargon but when it comes to your Buildings Insurance, there\u2019s no room for misinterpretation.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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Did you know that in 2022, fewer than one in ten properties are properly insured? Due to rising construction costs, inflation and a slew of other factors, underinsurance is more prominent than ever. To ensure your cover is right, it\u2019s worth having a conversation with your broker or insurance provider now if you haven\u2019t already.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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You\u2019ve likely already heard some terms flying around, so we\u2019ve taken the liberty of spelling these out in clear language, so you know exactly what they mean. Jargon. Busted.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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Sum Insured<\/span><\/strong><\/p>\n<\/div>\n<\/div>\n

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When you insure a building, you are responsible for determining the amount you want to be covered for, or the Sum Insured, based on how much it would cost to rebuild your entire property from scratch. Your insurer will decide how much to charge you for the insurance based on this amount.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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The building\u2019s sum insured is the maximum amount of money your insurer will pay out if you claim on your Buildings Insurance. This includes the cost of professional fees such as architects, demolition costs and labour. The sum insured of your property can be very different to the market value of your property.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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Average Clause<\/span><\/strong><\/p>\n<\/div>\n<\/div>\n

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If you insure your building for less than it\u2019s worth, the average clause determines how much your insurer will pay out when it comes to making a claim.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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For example, if you insure a property that would cost \u00a3600,000 to rebuild for \u00a3300,000, you are underinsured by 50%. Due to this, the average clause dictates that whenever you claim on your policy, your insurer will only pay out a maximum of 50% of any claim you make.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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No matter how small the claim is, you will always be subject to that 50% limit. Therefore, If you claim for \u00a35,000, you will receive a maximum of a \u00a32,500 payout.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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Note: This is a very simple example, you can be underinsured for any amount and the percentage that you are underinsured by will be applied to every claim you make \u2013 no matter how small the claim.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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Index Linking<\/span><\/strong><\/p>\n<\/div>\n<\/div>\n

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If index linking is applied to your policy (this can be done at no extra cost to you), your sum insured will increase at each annual renewal to match inflation. This means that your policy will still account for the inflationary rise in the cost of materials and labour.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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How to avoid underinsurance<\/span><\/strong><\/p>\n<\/div>\n<\/div>\n

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As well as reviewing your Buildings Insurance annually, it\u2019s important to review your insurance any time you make a significant change such as a renovation or, for commercial buildings, during times of peak stock levels. At [NAME OF BROKER] we work with <\/span><\/span>RebuildCostAssessment.com<\/span><\/span><\/a> to provide you with an accurate valuation of your property, at a discounted rate. To find out more, just give us a call on 0<\/span><\/span>191 482 1219<\/span><\/span><\/a>.<\/span><\/span><\/p>\n<\/div>\n<\/div>\n

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https:\/\/www.rebuildcostassessment.com\/commercial-property<\/span><\/span><\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Are you underinsured? Maybe there\u2019s a time and place for jargon but when it comes to your Buildings Insurance, there\u2019s no room for misinterpretation. Did you know that in 2022, fewer than one in ten properties are properly insured? Due to rising construction costs, inflation and a slew of other factors, underinsurance is more prominent […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false},"categories":[1],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/wp-json\/wp\/v2\/posts\/7470"}],"collection":[{"href":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/wp-json\/wp\/v2\/comments?post=7470"}],"version-history":[{"count":1,"href":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/wp-json\/wp\/v2\/posts\/7470\/revisions"}],"predecessor-version":[{"id":7473,"href":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/wp-json\/wp\/v2\/posts\/7470\/revisions\/7473"}],"wp:attachment":[{"href":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/wp-json\/wp\/v2\/media?parent=7470"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/wp-json\/wp\/v2\/categories?post=7470"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/networkportfolio.co.uk\/ncinsurance.co.uk\/wp-json\/wp\/v2\/tags?post=7470"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}