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Should I simply reduce my sum insured to save premium?
Too many businesses have treated insurance as a low priority nuisance and therefore tried to under-insure. All of them regretted the decision when they had a claim.
Worse still, for many types of insurance, if you have under-insured, the insurer will reduce the amount of claim payable by as much as you have under-insured.
e.g. If you have insured only $50,000 on $200,000 worth of stock and a quarter of it was lost in fire, you would not get 100% of the loss - although it is about $50,000. Instead you’ll get $12,500 - a quarter of the $50,000 you have insured.
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