Underinsurance occurs when you insure your Building, Fixtures & Fittings/Plant and Machinery for less than the amount it will cost to reinstate your Building or to replace your Fixtures & Fittings/Plant & Machinery.

Your Buildings/Fixtures/Fittings & Plant and Machinery should be insured for the full rebuilding/replacement cost as of 2024 prices.

This includes:

  • Fees related to professionals like architects and surveyors
  • Any additional costs necessary to meet current building regulations

The amount you insure your property for is referred to as the sum insured. The amount you insure your building for, must include the full cost of reinstating the property and take into consideration the cost of demolition and debris removal.

 

 You are responsible for setting the sum insured.

 

We strongly advise you to review your Building, Fixtures & Fittings/Plant and Machinery sums insured to avoid the risk of being underinsured and incurring unexpected replacement costs.

Factors such as shortages in materials, global wars and government regulatory changes have resulted in increased cost. Such costs have led to an increase in both the Consumer Price Index and Tender Price Index which have in turn resulted in an increase, in both rebuilding or replacement costs.

 

For Example:

A building with a full rebuilding cost of €1,000,000 is insured for €700,000 i.e. only 70% insured. If there's partial damage to the building of say €500,000, then only 70% of the claim may be paid out, equaling €350,000. It's important to consider that, in the event of full damage where the building is totally destroyed, then the €700,000 will be paid – but this still only represents 70% of the replacement cost.

 

We strongly recommend you obtain a professional reinstatement valuation, which would confirm the correct building sum insured you require on your insurance policy.

Should you have any queries or concerns or wish to make any changes to your policy at any stage during the policy period please get in touch with your account executive or contact us on 01 213 5000.