HHLE PROPERTY MATTERS SPRING 2021 - Flipbook - Page 28
When considering the settlement of a buildings insurance claim, one of the
biggest associated issues is under insurance. Indeed, a property has to be
insured for an adequate sum if it is to be fully reinstated. Thankfully, total
loss claims on buildings are a relatively rare occurrence. They do happen
though, and it is important to note that under insurance plays a key part in
partial loss insurance claims as well.
To correctly determine an adequate insurance sum, a number of very
significant factors need to be taken into account. These can all hugely
impact the amount a building should be insured for, and might include:
- Demolition and site clearance costs.
- Planning fees and surveyors fees.
-Fixtures and fittings to the buildings
(e.g. kitchens, bathrooms, heating systems).
- Where the property is located.
- Age of the building and how it is constructed.
- If the property is listed.
Under insurance can have a devastating consequence on a claim. For
example, consider you have a property with a sum insured of only £250,000,
but the true rebuild sum insured ends up being double that amount, at
£500,000. You can expect the claim to be reduced by the proportionate
amount of the amount underinsured, so in this scenario, a likely settlement
for a £100,000 claim could be as low as £50,000 - which obviously wouldn’t
be sufficient to cover the rebuild costs.
Whilst insurers tend to index link the sum insured of your buildings
(whereby they increase the sum insured by a nominal percentage year on
year), this is no substitute for a full valuation. It is always best practice to
obtain a professional valuation of the sum insured of all of your buildings,
at least every 5 years, to ensure that the sum insured is set adequately and
We do appreciate that taking the time to consider whether each of your
buildings is fully insured can seem like a daunting prospect. As a company,
at H&H Insurance Brokers we have many years’ experience in providing
support and advice to all types of businesses. Additionally, we always work
closely with our colleagues at H&H Land & Estates to ensure our advice on
Property Insurance and rebuilding costs are as current and comprehensive as
it can be.
H&H Insurance Brokers
M: 07527 908513