Under Insurance refers to an insufficient insurance policy. This is one of the major reasons for denying claims. For Example, If you insure a stock of 5 Cr for only 2.5 Cr then, on a claim of1 Cr you will only be paid 50L as you have 50% underinsurance. Normally, there is 5% tolerance that most insurers keep but anything below that calls for underinsurance.
On the contrary over insurance is not a big deal for insurers. One can be insured of 10 Cr for a stock of 5 Cr and if a claim of 1 Cr arises will be paid completely. Only thing is one has to shell out extra premium.
One of the ways to avoid underinsurance is to get yourself valued every year so that the real replaceable value of the goods is in line with the Sum Insured of the policy.
We at CKP Insurance Brokers take into considerations all these nuances before providing an insurance solution.
Reach out to us at 9920099273 or info@ckpinsurance.in to know more
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