Are You Underinsured?

Check values against today’s needs

Underinsurance can arise when values, limits or assumptions no longer match what you need to protect. It can affect households as well as businesses. A practical review starts with what you own, how it is used and what it would cost to repair or replace under the policy’s settlement basis.

For a home, consider rebuilding costs separately from market value, and review contents and specified valuables. For a business, consider premises, stock at busy periods, fit-out and equipment. Specialist valuation advice may be useful where an ordinary estimate is not reliable.

Review changes and policy detail

List purchases, renovations, relocations and changes in occupancy or operations since the last review. Check whether the relevant insurer has accepted any required updates. A request or conversation is not itself confirmation that new assets or activities are insured.

Read the schedule alongside the policy wording. Overall sums insured do not remove individual sublimits. Check the events that trigger cover, exclusions, security or occupancy conditions and any average or co-insurance provision. Where applicable, underinsurance provisions can reduce a payment even when a loss is smaller than the total sum insured.

Consider recovery time and excesses

For a business, think about replacement lead times, approvals, rebuilding and the time needed to regain customers. Business interruption definitions and indemnity periods need their own assessment; accounting profit is not automatically the policy’s insured gross profit.

Choose an excess with regard to affordability, not an absolute preference for a higher or lower amount. Review whether different events have different excesses. If paying by instalments, check the arrangement, total cost and any charges; availability and terms can vary.

Bring the checklist to a conversation

An up-to-date asset list, recent changes and your policy documents give CPC a useful basis for discussion. We can help explain relevant differences and identify questions for the insurer or a qualified valuer. Neither a broker review nor a higher sum insured guarantees claim acceptance or full payment.

Contact CPC if you would like to review these assumptions. This is general information only; cover and claims are subject to insurer acceptance and the agreed policy terms, conditions, limits and exclusions.