Briefly, yes.

I had a household claim a couple of years ago, and the loss adjuster went round the whole house to see whether he thought I was under-insured. He thought I was, until I discovered that the actual sum in my policy paperwork was much higher than the value he'd been told by the insrurer, and so my claim was met in full. He agreed that the sum in my policy was the right value for the house & contents.

G.

Bryce Curdy:How do insurance companies treat any claims where the level of contents insured is less than the actual value. For example, if I have £100000 of contents but only £50000 contents insurance, how would a claim for £10000 be treated?

The majority of property insurances incorporate a pro rata condition of average, known simply as the 'average' clause. This states that the insured is acting as his own insurer for the difference between the actual value and the declared value and bears a rateable share of any losses.

Sum insured /divided by/ Value of contents at risk x loss

Your scenario is quite simple to calculate. 50,000/100,000x10,000 = £5,000 payout. In this scenario, the person is insuring for half the value of the contents and therefore will receive half of the loss amount.

it would be thrown out. the same applies if you overinsure then try to claim for something you don't have. if you underinsure you pay less premiums, the more contents you have the higher the premiums.

How do insurance companies treat any claims where the level of contents insured is less than the actual value. For example, if I have £100000 of contents but only £50000 contents insurance, how would a claim for £10000 be treated?