DEACON INSURANCE WARNS OF THE DANGERS OF UNDERVALUING PROPERTY
Most properties in the UK have not been professionally valued for insurance purposes, which is essential for adequate cover. Valuations for purchase, provided by a bank or estate agency, may not reflect the true cost of rebuilding a property.
Deacon’s Head of Business, Penny Jepson, said: “We cannot emphasise enough the importance of correctly valuing and insuring your property. The BDV of a property should represent the total cost of rebuilding a property, including any garages and outbuildings. This may sound obvious, but it’s frightening how many homes are underinsured.
“During a recession, it is understandable that people are looking to save money where ever they can, but underinsuring your home to save a few pounds on your monthly premium is a huge risk. It’s a false economy, which could end up costing you a lot more in the long run.
"In a recent example, following a claim, our Loss adjuster found a property to have a BDV of only 65% of it’s true value. Because of this the claims settlement was significantly less than the estimate, leaving the home owner liable to pay the shortfall.
For only an additional few pounds per month the property could have been insured at its correct BDV and the full amount of the claim would have been paid.”
The British Insurance Brokers’ Association (BIBA) has also warned consumers to seek professional insurance advice as an increasing number of consumers are reducing their insurance cover as a result of the recession. BIBA is concerned that householders who cut insurance protection without guidance from an insurance broker, could be exposed to financial risk if they suffer a fire or burglary.
Eric Galbraith, BIBA Chief Executive, said: “I am concerned that families are putting themselves at financial risk by reducing insurance.
“Cutting out the wrong part of your insurance protection could be a costly mistake. Professional advice from a broker on a tailored insurance programme is the only way to achieve a cost effective solution.”
Not all home owners underinsure their property to save money and many are unaware that their homes do not have suitable cover. This is becoming more common as an increasing number of people are opting to improve their existing property instead of purchasing new as house prices remain low. As homes are upgraded the value of the property inevitably increases - this is often not taken into consideration with regards to insurance.
Almost half of the claims for damage to buildings are now being settled below the cost of reinstatement, leaving property owners facing the prospect of funding the difference themselves. As such, Deacon strongly advises homeowners get their property professionally re-valued by a surveyor at least every three years to safeguard their homes.
Deacon, which was established in 1989, is part of the Property & Commercial Division of Barbon Insurance Group. Deacon provides a wide range of insurance solutions for residential, commercial and mixed-use properties, including Blocks of Flats Buildings; Directors’ & Officers’ Liability; Emergency Assist; Engineering Insurance and Inspection; Contents; and Let Property.
The Property & Commercial Division of Barbon Insurance Group comprises four strategic business units located in Bournemouth, Croydon, Bordon and Chelmsford.
For more information on Deacon and the products available telephone 01202 310101 or visit www.deacon.co.uk.
DEACON INSURANCE WARNS OF THE DANGERS OF UNDERVALUING PROPERTY
Most properties in the UK have not been professionally valued for insurance purposes, which is essential for adequate cover. Valuations for purchase, provided by a bank or estate agency, may not reflect the true cost of rebuilding a property.
Deacon’s Head of Business, Penny Jepson, said: “We cannot emphasise enough the importance of correctly valuing and insuring your property. The BDV of a property should represent the total cost of rebuilding a property, including any garages and outbuildings. This may sound obvious, but it’s frightening how many homes are underinsured.
“During a recession, it is understandable that people are looking to save money where ever they can, but underinsuring your home to save a few pounds on your monthly premium is a huge risk. It’s a false economy, which could end up costing you a lot more in the long run.
"In a recent example, following a claim, our Loss adjuster found a property to have a BDV of only 65% of it’s true value. Because of this the claims settlement was significantly less than the estimate, leaving the home owner liable to pay the shortfall.
For only an additional few pounds per month the property could have been insured at its correct BDV and the full amount of the claim would have been paid.”
The British Insurance Brokers’ Association (BIBA) has also warned consumers to seek professional insurance advice as an increasing number of consumers are reducing their insurance cover as a result of the recession. BIBA is concerned that householders who cut insurance protection without guidance from an insurance broker, could be exposed to financial risk if they suffer a fire or burglary.
Eric Galbraith, BIBA Chief Executive, said: “I am concerned that families are putting themselves at financial risk by reducing insurance.
“Cutting out the wrong part of your insurance protection could be a costly mistake. Professional advice from a broker on a tailored insurance programme is the only way to achieve a cost effective solution.”
Not all home owners underinsure their property to save money and many are unaware that their homes do not have suitable cover. This is becoming more common as an increasing number of people are opting to improve their existing property instead of purchasing new as house prices remain low. As homes are upgraded the value of the property inevitably increases - this is often not taken into consideration with regards to insurance.
Almost half of the claims for damage to buildings are now being settled below the cost of reinstatement, leaving property owners facing the prospect of funding the difference themselves. As such, Deacon strongly advises homeowners get their property professionally re-valued by a surveyor at least every three years to safeguard their homes.
Deacon, which was established in 1989, is part of the Property & Commercial Division of Barbon Insurance Group. Deacon provides a wide range of insurance solutions for residential, commercial and mixed-use properties, including Blocks of Flats Buildings; Directors’ & Officers’ Liability; Emergency Assist; Engineering Insurance and Inspection; Contents; and Let Property.
The Property & Commercial Division of Barbon Insurance Group comprises four strategic business units located in Bournemouth, Croydon, Bordon and Chelmsford.
For more information on Deacon and the products available telephone 01202 310101 or visit www.deacon.co.uk.