The aim of insurances is, in case of an incident like theft, fire- or water-damages, to return the insurance taker, as accurately as possible, in the same financial situation he has been afore this very incident. Therefore, exact values need to be insured to avoid under-insurance.
A Concrete Example
Family Smith's house was burgled last Saturday evening. Jewelery, cash and clothes, worth 50.000€ have been stolen and paintings, desks, computers, and other equipment, worth a 10.000€ have been destroyed.
Total loss: 60.000€
Furniture was assured for 25.000€ whereas, in reality, it had a total worth of 100.000€. If insurance companies elaborate such an amount, which they usually do, you're considered under-insured. In this example, 25.000€ out of 100.000€ means 1/4. Family Smith will be reimbursed by 1/4 of the total loss (60.000€), namely 15.000€.
Moral of the Story
Take some time to re-evaluate the insured amount of furniture from time to time. Estimating values of real estates (not furniture) could be even more serious.
Do not hesitate to contact us!
DEGANO Consulting is looking forward to helping you.