There's an error that no company admits to making — precisely because they don't know they are. It's called underinsurance, and it occurs when the values declared in a policy fall below the real value of the insured assets.
The result: at the time of a claim, the insurer applies the proportional rule and pays only a fraction of the loss. The company thinks it's fully covered. It isn't.
How it happens
- The insurance was taken out 5 years ago with values from that time
- The business grew: more stock, more equipment, new assets
- The policy renewed automatically, without value revision
- Nobody noticed. Until the claim.
The proportional rule explained
If your stock is worth €400,000 but you declared €200,000 in the policy, in the event of a total loss, the insurer will only pay 50% — regardless of the premium you paid. It's contractual mathematics, not goodwill.
This principle applies to practically all branches: multi-risk, fire, equipment, stock. And it's legal.
How to prevent it
- Mandatory annual review of all insured values
- Inclusion of an automatic indexation clause in some cases
- Professional valuation of high-value properties and equipment
- Proactive communication of changes to the broker
- Independent audit of coverages by a specialist
What we do at Adler & Rochefort
During the mandatory annual review we conduct for all our clients, we systematically verify declared values versus real values. In 2025, we identified underinsurance situations in 34% of the reviews carried out — all corrected before any claim occurred.
Do you want to know if your company is among the 34%? Contact us for a free, no-obligation analysis with no small print.