Is Your Property Fully Covered?

THE STRENGTH OF YOUR COVERAGE IS IN YOUR REINSTATEMENT VALUE

Your sum insured should reflect the reinstatement value of your property and its contents. Your reinstatement value is simply the full cost of replacing or rebuilding your property if it is destroyed by something you are insured for like a fire, flood or earthquake.

Once you are fully covered, if you choose to rebuild then you receive the reinstatement value of the property less any applicable deductible even if you choose to rebuild elsewhere. If your sum insured value is not your reinstatement value, your claim will be settled using indemnity.

Your Indemnity is for your financial recovery

To be indemnified means that in the event of a loss, we’ll put you back in the exact financial position you were in before the loss.

A household policy, for example, it will not take into consideration ‘wear and tear’ or depreciation. This means your sum insured should always reflect the current replacement value of your assets since your settlement is based on that amount. So, if you’ve made improvements or bought special furniture or electronics, it’s important to update your sum insured.

Don’t get caught underinsured

Under insurance is simply insuring your property for an amount that is lower than its true current value or reinstatement value.

This means that if the property is damaged or destroyed, you will not be able to get back the full value of the property.

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