Whenever you hear “Sums Insured” it is usually related to Property and usually shows the maximum level an insurance settlement is expected to pay out in the event the property was destroyed or damaged.
One misconception is that the value of your home is the sums insured level, this is however not the case in point of fact it can vary wildly, This you can usually find on the valuation report of your property, it is not the value of the property nor even the price you paid for the property.
The Guideline rule of thumb for the setting of this level should include the following factors:
- The tearing down and clearance of the existing property
- The rebuilding of the property to its current standard
- The scale of land owned surrounding your property as well as connected buildings
- Debris Removal Fees
- Architect Fee’s
- Building Regulations
- Statutory legislation
Who is responsible for getting the Sums Insured Correct?….. You!
It is advisable every year when renewing your policy you pay close attention to the sums insured, working with a local insurance broker or a broker whom knows your business and the risks you face is obviously the best way forward, often intimate knowledge of your business is key to planning your insurances.
Taking the time to sit down and work out what your risks are and what your insured level is, is critically important to the success of anything you do, a single wrong calculation in this matter and you could face serious and devastating consequences both financially and perhaps personally.