One of the biggest topics of conversation recently is the cost of living. Inflation is making it impossible to stretch our pennies further, and it’s leading to many cuttingcosts where they can. One of those areas could be Mosque insurance. After all, do you really need to pay out for something that you don’t seem to be using?
What Is Underinsurance?
Underinsurance is when the sum insured isn’t sufficient to cover the asset you are insuring, therefore any claim payout isn’t enough to cover the repair/replacement. Put simply, it means you won’t get enough from the insurer to do all the work necessary, so you’ll end up paying out of your own pocket.
In the worst case scenario, Insurers would be well within their rights to void a policy and refuse a claim payout if they deem the underinsurance to be a deliberate or reckless act to reduce the insurance premium.
Unfortunately, with inflation rising so rapidly in recent months (reaching 10.1% in July 2022 [1]), there’s now a very real possibility that before your renewal is due, you may be underinsured.
How Inflation Affects Rebuild Costs for Buildings Insurance
The costs of building materials have increased steeply in recent months. In fact, they’re higher than the rate of inflation. On top of that, labour shortages caused by Brexit and the complexity of new rules for cross-border trade have led to longer timeframes and job quotes going up.
How Inflation Affects Content Replacement Costs for Contents Insurance
The building work may be fine, but what about replacing items in the Mosque? Break-ins, water damage, fire damage, etc. can lead to the need to replace items, and you’ll use your Mosque insurance for that. What happens if you’re underinsured?
Costs of items have gone up with inflation. We’ve seen it with food, but it’s also the case for furniture, décor, and fixtures. Underinsuring a Mosque means a claim payout won’t cover the full cost of replacing the damaged items and having to use your own funds to make up the shortfall. Think of the costs of the:
- Prayer rugs
- Benches, chairs & tables
- Speaker System
- Books
- Dividers
- Shoe racks
What You Can Do to Avoid Being Underinsured
Your buildings insurance and contents insurance are two different sections. It’s important to make sure both sections are adequate for your risk needs. What are the costs of rebuilding a Mosque right now? What are the costs of replacing all the essential items? Only then can you avoid underinsuring a Mosque.
Do you need better coverage for your Mosque? Need to make sure underinsurance isn’t a problem? Get in touch with us today to talk about your coverage needs.
Sources:
https://www.theguardian.com/money/2022/aug/25/personal-inflation-rate-calculator-uk-price-rises-2022
