How do I know if I am insured for the right amount?

When you purchase contents insurance, you are insured for a certain amount. It is important that you are insured for the right amount. If you suffer damage, you obviously don't want to have to pay out only part of it.

Insurers take into account the maximum claim in insurance. This is the maximum amount you will be paid in the event of a claim. In case of fire, for example, your house can burn down completely in no time. In that case, the contents will be completely lost. It is therefore crucial for an insurer whether you are insured for €20,000 or for €50,000. If you are insured for too low an amount, you will only receive a partial payment for the damage.

What is meant by underinsurance?

Anything in your home that you can move is household effects. These include your closet, dining room chairs, your bed and television ect. Properly estimating the value of your contents is a very difficult task. You have to count everything and there is a big chance that you will overlook something. When damage eventually turns out that your household contents have a higher value than insured, you are underinsured. You will then only receive partial compensation for the damage. If your household contents are insured for €10,000, but the actual value is €20,000, you will be paid: 10,000 / 20,000 x the damage amount. So you will receive half of your damage.

Properly estimating the value of household contents is actually an impossible task. After all, you have to count everything from clothing to electronics to the accessories in the kitchen. If damage shows that the contents have a higher value than insured, you will only receive a portion of the damage. The payment is pro rata. If the household contents are insured for €25,000, but the actual value is €50,000, then in the event of damage you will receive: 25,000 / 50,000 x the damage amount.