Itβs estimated that rebuild and replacement costs have risen 24% this year, and with many other costs increasing, organisations will want to make sure their insurance is cost-effective and covers them adequately for their most important risks. If you would like to review your insurance, then get in touch with one of our brokers.Many costs are being impacted directly or indirectly by inflationary increases. This 6 part series of posts explains why youβll be paying more to transfer buildings and contents risks through insurance on renewal as well as explain terms you might hear such as claims inflation and index linking/indexation.
β‘ Why are insurers increasing premiums?Insurers are increasing premiums based on an index they apply to the declared value of items each year to keep in line with claims inflation, so the sum insured reflects the true cost of reinstatement and so avoids you as the policyholder being put in a position of underinsurance.
β‘ What is claims inflation?Claims inflation is the increase in the amount it would cost to settle a claim.Due to increased costs in materials and labour and other inflationary costs, reinstatement costs are higher, so the cost of settling claims following damage to buildings/contents will also increase.
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