What is Underinsurance and How to Know Your Park Home is Covered
What is underinsurance?
Underinsurance is a situation which arises when the value of the property damaged or stolen is of a type that is covered in your policy, but of an amount that exceeds the maximum limit covered in that policy.
Finding out you are underinsured can be a serious problem when it comes to making a claim on lost or damaged property that you thought was covered.
Provide accurate information
Underinsurance can occur when the information you initially provide to your insurer is inaccurate or partial. Be sure to go through your policy carefully with a representative of your insurer to avoid any inaccuracies in the information they have. Their decision to insure you will then be a sound one.
Be sure to report additions and improvements you make to your park home to your insurer. This will help to factor in any possible increase to the value of your home.
A simple phone call to us at Park Home Assist is all you need to be sure that an experienced professional will take you through the process of gathering and providing all the right up-to-date information.
Always read your documents
Whoever provides your insurance cover, it is important to read your policy thoroughly so this doesn’t happen to you.
At Park Home Assist you are covered for up to £500,000, so underinsurance is very unlikely to arise as an issue. Whoever your insurer is, you should be aware of the following problems before they lead to any loss of cover.
Buildings and contents insurance or both?
Underinsurance can sometimes occur when there is a confusion about what counts as the building and what counts as the contents. Check whether built-in appliances, laminate flooring and fitted wardrobes count under contents or buildings insurance. This should not lead to underinsurance issues unless you only have buildings cover or only contents cover and find the items you are claiming for are categorised in the ‘wrong’ one for you.
This issue arises only in cases where your building and contents are covered by separate policies. At Park Home Assist we offer buildings and contents insurance combined to a level of £500,000, which in our many years of experience, we have found to be sufficient for the majority of park home owners.
Do I need to insure individual items?
Sometimes, particularly in the case of jewellery, it is wise to insure ‘valuables’ that have a large individual value. One common cause of underinsurance is the failure to do this. The level of cover offered by a Park Homes Assist policy will often be sufficient to cover these items, but you should check to make sure.
We offer optional ‘Valuables and Personal Possession’ cover which covers any item up to £1,000 without you needing to specify the item. So, you need to specify any item that is valued at more than £1,000 when you add this cover to your policy. We define valuables as jewellery, furs, gold, silver, gold-plated or silver-plated items and works of art (paintings and sculptures).
How do ‘New for Old’ policies work?
If you are insuring anything under a ‘new for old’ policy be sure to calculate this when considering the right level of cover for you. One common mistake is to confuse the resell value with the value of an item under a ‘new for old’ policy. Valuables such as jewellery, for instance may not fetch anything like the value of a new replacement on the second-hand market. This of course goes for the building too.
Be aware that if you claim for an item that is insured, but which has a value when replaced with a new item that exceeds your cover, the policy as a whole may be written off. If you take advantage of our ‘Valuables and Personal Possession’ insurance, for instance, you should take into account the value of new replacements when deciding the level of cover you need for each item.
Are there special events I should think about?
Special events such as religious holidays or other events like a marriage or birthday can lead to a sudden and temporary increase in the value of items in your home. You should make sure that your insurer makes allowances for this in the cover they provide to you.
At Park Home Assist, for one month before and one month after a special event or religious holiday or festival the value of your cover is increased by 10%, where the value of contents owned by you is increased due to that event. With winter holidays and Christmas approaching, this should ensure you are not underinsured. Please, however, still take care to individually insure items of exceptional value. It is a good idea to use our ‘Valuables and Personal Possessions’ cover for this.
We hope this guide has drawn your attention to the problem of underinsurance and helps you to avoid this ever arising. If you are unsure about any of the information here or require any advice about the cover on your park home please call us on: 01604 946 796
This is a marketing article from Park Home Assist, multi award-winning providers of residential park home insurance. If you would like to speak to an advisor regarding insurance for your park home, please contact our friendly team in our Northampton office on 01604 946 796.
For more information about any of our other insurance products, please choose your product of interest below: