Easter Edition- Insurance Revaluations Why It’s Important

Why are revaluations required and what’s involved?

In light of recent economic events pertaining to inflation, values on assets have been affected. This has also affected your insurance cover as well. It’s now very important to know that the “declared value” quoted on your insurance policy is accurate.

If it’s too low, you’d be under-insured. If it’s too high, your premium would be higher than it needs to be. Neither condition is acceptable to your insurer, so a formal revaluation exercise ensures the numbers are correct to avoid average being applied.

WHAT IS AVERAGE?
If a Sum Insured (declared value) on an insurance policy is subject to Average,the Sum Insured would be less than the market
value of risk (insured property) at the time of loss. Any claim submitted will be reduced in the same proportion as the amount of under
insurance that existed at the time of loss.

WHY DO INSURERS APPLY AVERAGE?
When you insure your assets, like a building, you advise your Insurer of the ‘insurance value’ which then forms the sum insured under your policy. The insurer charges you an Insurance Premium based on this declared sum insured.If you get this insurance value wrong and it is lower than the real value at risk, then your premium will be based on the wrong value and will be lower than you should have paid to cover the property at risk. It would not be fair on the insurer and their other customers if you received a full insurance payment if you have only paid a part of the whole premium that should be due. To protect Insurers in this scenario, the policy contains a Condition of Average. Simply the Condition of Average says that if you declare an insured value that is X% of the true value, then you have only paid X% of the premium due and will only receive X% of your claim.

WHAT WE CAN DO FOR YOU
Zimbabwe Insurance Brokers Limited can request your insurer to carry out a free valuation exercise on your property including motor vehicles (whether it is personal or business). The insurer can assess the property accurately, and advise on the current cost of rebuilding it in the event of a major insurance claim or the market value of the vehicle(s). Due to our economic evenironment we regular valuation assessments especially on motor vehicles to be done. This will ensure that you are paying the right amount of insurance premium, for the right level of your insurance cover. Without this, you may end up paying too much or not have sufficient cover, which would reduce the payment made by the insurer (average).Speak to your handling ZIB personnel to arrange for your free valuation assessment to be carried out.