Underinsurance

Underinsurance means the level of cover you have is less than what you need. Here’s how to make sure you have the right level of cover for your home and the things in it.

Bank of Scotland Home Insurance Select is underwritten by Lloyds Bank General Insurance Limited. 

What is underinsurance?

If the level of cover, you have isn’t enough to rebuild your home or replace your belongings that means you’re underinsured.

This can happen if you underestimate the cost of rebuilding your home and replacing its contents in your quote, or buy new items and don’t update your policy to include them.

To make sure you’re fully covered for events like fire, flood or theft, you need to have enough insurance to cover all your costs.

Being underinsured is different from being uninsured. When you're uninsured, you have no insurance at all. If you don't have the right level of insurance, you might have to pay more when you make a claim. Having the correct level of cover in place ensures your home and all your belonging are covered.

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Bank of Scotland Home Insurance Select is underwritten by Lloyds Bank General Insurance Limited. 

Getting the right level of insurance

Here’s what you need to know to make sure your home and belongings are covered with the right level of buildings and contents insurance.

Buildings insurance

Your mortgage lender will expect you to have buildings insurance that covers the cost of rebuilding your home from scratch.

Remember, the full rebuild cost of your home could be more than its current market value. That’s because it includes the cost of all the labour and materials needed to clear and rebuild your property.

Before doing any renovations, always check your policy to find out if you need to tell your insurer first. 

Contents insurance

Contents insurance covers the things you’d take with you if you moved home, like:

  • clothing
  • furniture that is not a permanent fixture or fitting
  • electronics
  • curtains and carpets
  • ornaments and trinkets
  • artwork.

Certain items, like jewellery and expensive gadgets, can have claim limits. You can name these items specifically on your policy to cover them for their full value. And if you’ve bought something new, don’t forget to update your policy to include it.

How to value your home for buildings insurance

It’s important that you give an accurate value for your home to avoid being underinsured.

You’ll need to work out the full value of your property, including the cost of all materials and labour required to completely rebuild it. Here’s how you can do this:

  • Use an online rebuild cost calculator. Measure the length and width of your ground floor and multiply these two numbers to find the size of your home in square metres. Do the same for any upper floors, then add up the total.
  • Use a Chartered Surveyor. They’ll take measurements and give you a rebuilding cost assessment.
  • Leasehold flats. If you live in a leasehold flat or maisonette, it is likely that the freeholder will already have buildings insurance.