Underinsurance and its Impact when making an Insurance claim

For example, if the cost to rebuild or replace your property or contents is £100,000 but you have taken out insurance for only £50,000, then you would effectively be underinsured by £50,000 or 50%.

In the event of a fire that destroyed all of your contents insurers would apply the ‘average clause’ and you would receive £25,000, that’s a lot to lose when you had £100,000.