As a property owner, you know the importance of having insurance to protect your assets. However, simply having insurance is not enough. In the event of property damage, it is crucial to have the right coverage and to avoid the pitfalls of under insurance. In this article, we will discuss the importance of maximising your property damage claims and how to avoid the common mistakes of under insurance.
Why Is Maximising Your Property Damage Claims Important?
Property damage can occur in a variety of ways, from natural disasters to accidents and vandalism. When these events happen, it is essential to have the right insurance coverage to protect your property and minimize financial losses.
Commercial Property Damage Claims
For commercial property owners, damage to their property can result in significant financial losses. This can include damage to the building itself, as well as any equipment, inventory, or other assets within the property. In these cases, having the right insurance coverage is crucial to ensure that the property owner is adequately compensated for their losses.
Vibration Property Damage Claims
Vibration damage is a common issue for property owners, especially those located near construction sites or heavy traffic areas. Vibration damage can cause cracks in walls, foundation damage, and other structural issues. In these cases, it is essential to have the right insurance coverage to cover the cost of repairs and any potential loss of income due to the damage.
The Pitfalls of Under Insurance
Under insurance occurs when a property owner does not have enough insurance coverage to fully compensate for their losses in the event of property damage. This can happen for a variety of reasons, including not updating insurance policies regularly, not understanding the full value of the property, or not considering all potential risks, and under valuing your risk, your sums insured.
The most obvious pitfall of under insurance is not having enough coverage to fully compensate for property damage. In these cases, the property owner may be left with significant financial losses that they are unable to recover. This has become a growing problem in the last three years with inflation increases driving exponential cost increases in production and repair, leveraging repair costs.
Loss of Income
In addition to the cost of repairs, property damage can also result in a loss of income for commercial property owners. This can occur if the property is unable to be used for its intended purpose, such as a rental property or business location. Without the right insurance coverage, the property owner may not be able to recover this lost income.
Under insurance can also lead to legal issues for property owners. If a property owner is unable to fully compensate for damages, they may face lawsuits from tenants, customers, or other parties affected by the property damage. This can result in additional financial losses and damage to the property owner’s reputation.
How to Avoid Under Insurance
To avoid the pitfalls of under insurance, it is crucial to have the right insurance coverage in place. Here are some tips to help you avoid under insurance and maximise property damage claims.
Regularly Review and Update Insurance Policies
It is essential to regularly review and update your insurance policies to ensure that you have adequate coverage. As your property and business grow, your insurance needs may change, and it is crucial to adjust your coverage accordingly. This can help prevent under insurance and ensure that you are fully protected in the event of property damage.
Consider All Potential Risks
When determining the value of your property and the amount of insurance coverage needed, it is crucial to consider all potential risks. This includes natural disasters, accidents, and other events that could cause property damage. By considering all potential risks, you can ensure that you have enough coverage to protect your property and minimize financial losses.
Work with an Experienced Insurance Broker
Working with an experienced insurance broker, preferably a human! can also help you avoid under insurance. A Broker can assess your property and business needs and help you determine the right coverage for your specific situation based on their knowledge and expertise. They can also help you understand and explain the terms and conditions of your insurance policy and ensure that you have adequate coverage for all potential risks.
Examples of Under Insurance
Unfortunately, under insurance is a common issue for property owners. Here are two examples of under insurance and the consequences it can have.
In December 2022, temperatures dropped suddenly across England, after a pre longer period temperatures rose. Pipes containing water became frozen and expanded, splitting joints and subsequently causing leaks and floods as frozen pipes thawed. Many property owners we found were underinsured and were unable to fully recover their losses. This resulted in financial struggles for these property owners and, in some cases, re-mortgaging their homes to cover the cost of repairs.
In 2019, a construction project in West London caused significant vibration damage to nearby properties. Many of these property owners were underinsured and were unable to fully cover the cost of repairs. This resulted in legal issues and financial losses for these property owners.
Who Can Help You Maximise Your Property Damage Claims?
In the event of property damage, it is crucial to have the right support to help you maximise your insurance claims. Independent FCA regulated loss assessors are licensed professionals who can help you navigate the insurance claims process and ensure that you receive fair compensation for your losses. They can assess the damage to your property, review your insurance policy, and negotiate with the insurance company on your behalf. They can connect you with specialist litigators if civil action or a complaint against your insurance company is necessary.
Maximising your property damage claims is crucial to protect your assets and minimise financial losses. Under insurance can have severe consequences for property owners, including financial struggles and legal issues. By regularly reviewing and updating insurance policies, considering all potential risks, and working with experienced professionals, you can avoid the pitfalls of under insurance and ensure that you have the right coverage to protect your property.