UK rented homes underinsured by £315 billion
Property owners struggling in the wake of Covid-19 face another invisible threat in the form of underinsurance.
The latest data from RebuildCostASSESSMENT.com reveals a massive shortfall in cover among rented homes and business properties. The insurance valuation providers estimate that privately rented homes in Britain could be underinsured by a whopping £315 billion, while for UK commercial property, the underinsurance total is around £325 billion.
“What this means is buildings across the country are woefully under-protected in the event of any kind of damage,” said James Scott-Brown, director at Rebuild Cost Assessment Ltd. “I fear that in the current financial climate many property owners simply would not survive the consequences of underinsurance.”
James went on to explain that nine out of 10 properties in the UK are insured for the wrong amount. The vast majority (79%) are underinsured, which means that when a claim is made, the amount paid out to cover the damage can be severely reduced.
“We’ve recently seen with the situation around business interruption cover that insurance contracts can lead to confusion. Underinsurance often leads to disputes with insurers. On average, we find that buildings are only covered for 69% of the amount they should be, leading to a considerable shortfall in cover.”
James added: “Now is not the time for anyone to discover their insurance policy won’t pay out the amount they’re expecting. This is a UK wide problem and it can only be resolved by property owners realising the risk they’re running and then making sure their buildings are insured for the right amount.”
RebuildCostASSESSMENT.com has recently produced an infographic highlighting its latest data around inaccurate buildings insurance, based on more than 11,000 property assessments over the past 12 months. It can be viewed and downloaded here.