Even the most professional of Storage facilities, with the highest level of risk management, can fall prey to events that could give rise to claims involving their insurer.
Certainly catastrophic weather episodes, as well as disastrous scenarios such as fires and floods will remind your customers of the value in insuring their belongings whilst stored with you. Unfortunately customers who take out your insurance still risk being out of pocket in the event of a claim. Rarely is this because the policy excludes the items lost/damaged or the type of claim, but because the customer has not insured their belongings for their correct and adequate value.
The Pitfalls of ‘Average’ and Under-insurance
In the case of under-insurance underwriters will apply what is called ‘average’, whereby the claim payment is proportionately reduced according to the degree of under-insurance. The principle behind this is if the customer has not paid the correct premium on the correct value, then why should they still receive a full claim settlement?
So if belongings worth £5,000 are insured for only a fifth of their value at £1,000 then in the event of a water damage claim for £500, where only some items have been affected, the maximum claim settlement will be £100 i.e. a fifth of the £500 claimed.
Only in the case of a ‘total loss’ e.g. catastrophe claims such as a fire where there is absolutely nothing left will underwriters not apply ‘average’, but then the customer can automatically be out of pocket. In this scenario, as a result of under-insuring, even though the customer would receive the full £1,000 that they insured for, they will be £4,000 out of pocket as they have lost belongings that were actually worth £5,000.
Our Useful Guide
Many customers will not appreciate the true value of their belongings and it is a task for most people to confidently calculate the value of all their possessions. With this in mind, we have put together a guide of useful hints and tips to assist your customer in valuing their goods correctly.
