A client's Brother in law insured his House and Contents via Outsurance.
I was asked to quote, but was "too expensive". I warned of potential problems, but was told he had had his car there, and their claim had been handled "fine".
Outsurance sent out valuators, who valued the property and contents at R6,000,000.
The house was subsequently gutted in a fire - burnt to the ground - 100% destroyed.
NOW - Outsurance are saying that the sum insured was inadequate, and are only prepared to offer R4,000,000.
FIRSTLY - I query how they can say there is under-insurance when THEY valued it (but they do say it is up to the client to ensure sums insured are adequate)
BUT - Insurance 101 - there is NO average applicable in the case of a total loss! Insurers pay out the sum insured, as Average is "Automatic", in that you are in for the uninsured portion. This is just their way of ducking paying BIG claims - as per the Noseweek article attached.
The problem is - one only finds the flaws when the brown stuff has hit the oscillating object!
OUTSURANCE4 - Noseweek.pdfOUTSURANCE3 - Noseweek.pdfOUTSURANCE1 - Noseweek.pdf