If property is insured for less that its true value, only a proportional part of the proved loss will be paid. This still applies where the amount of the loss is lower than the sum insured.
If sums insured are established by the insured, policy holders must accept responsibility for their accuracy and possibly the company's future.
Sums insured should be established by professional and qualified valuers. A valuation will also provide the necessary basis upon which to base a claim when a loss occurs.
At the same time, accurate records will be established providing evidence both as to the existence and value of plant, equipment and assets.
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