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unity scout insurance   Under-insrance  

If you're under-insured, you may not get the full amount needed to repair or replace your property, when you make a claim.

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How to avoid the nasty surprise of under-insurance

Finding when you make an insurance claim, that the policy you bought does not have enough cover can have devastating consequences.
Under-insurance, as it is called, can be a significant issue.

Why getting the right level of insurance cover is critical

If the amount declared to your insurer when taking out your policy is found to be lower than the assessed value at the time of the claim, then

  • The insurer may not pay the full amount needed to repair or replace it;
  • More premium may be charged; or
  • Different less favourable policy terms may be applied.

This may leave you to meet the shortfall from your Group’s funds.

Remember the Insurance Act 2015 requires Scout Groups to be strictly honest about the nature of your risk, including the value of your property.

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Sums insured

The sum insured or insured value is the amount declared when you take out or renew your insurance policy.  This is the maximum amount payable in the event of a claim.

Calculating the right level of cover for your buildings

It is important that the sum insured for buildings is the present day rebuild cost. This should be confirmed by a valuer, surveyor, or builder.

This is not the market value of your premises nor the price paid for the building.

Rebuilding cost vs market value

Costs and value can be very different. A building worth £1m on the property market because of the land it stands on might cost only £500,000 to rebuild.

Another premises, such as a listed building, in a different location might be worth only £200,000 on the market, but because of particular special features that may be more difficult, more costly, or take longer to rebuild or repair might cost £350,000 or more to rebuild.

The buildings sum insured will need to include costs for:

  • driveways, garages and outbuildings, boundary walls, gates, fences, etc.
  • materials;
  • labour;
  • architects;
  • surveyors and other legal fees;
  • the cost of demolition and debris removal;
  • VAT (as necessary); and
  • any public authority or planning costs and inflation or other increasing costs that happen during the policy period as well as any rebuilding period.

You should consider using professional valuation services to help you decide on your sums insured.

  • If insured under Unity’s Scout Property and Equipment scheme, we can arrange a free professional estimation service if you need more help with calculating the sum insured for your Scout building.  

Regular valuations are necessary to help ensure the sums insured are correctly assessed.

  • Unity recommends that the sum insured for building should be assessed every 3 years.

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Calculating the right level of cover for your contents and equipment

The amount that your Group’s contents and equipment should be insured for is its replacement-as-new value.

It should not be the price paid for the contents or equipment, as it may have been donated as a gift or purchased second-hand.

An up-to-date inventory of all of your equipment, etc, is useful when considering how much cover you need. Smaller items can add up to a significant sum, but often these items are not included on an inventory or fixed asset schedule.

Your inventory should be updated when you buy or are donated new or second hand equipment.  Also it should be updated, if you no longer own any items. 

Don’t forget to let your insurance broker know if you acquire new or second-hand items that need to be added to your insurance policy.

If you have items of specialised or complex equipment it may be useful to talk to the people who supplied them about the cost and availability of suitable similar replacements or repairs as these could take some time to replace.

If you have equipment that is no longer manufactured you might need to insure for the value of a new equivalent item.

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How Unity (Scout Insurance Services) can help

Unity can provide advice on how to assess sums insured and can help you to buy insurance cover that meets your needs. We will help you to understand the basis of your insurances and how sums insured can be calculated to ensure you are properly covered if you have a partial or a total loss.

If your Scout Group is insured under Unity’s Scout Property and Equipment schemeand you need help with your valuation we can provide free of charge guidance on your buildings sums insured.

We are partnered with IAS Chartered Loss Adjusters to provide an indication of rebuilding cost free of charge for anyone taking out the Scout Property & Equipment policy with us.

Please contact us for details.

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