Myths about property insurance cost more than the premium: they lead to bad decisions and disappointment at claim time. We've collected the most common ones – with the factual picture for each.
- "We're insured" isn't a status on its own: what matters is what for, how much, and on what conditions.
- The insurer settles according to the policy wording; surprises almost always come from conditions nobody knew about.
- The cure for myths is a 20-minute review: what's in the policy, and what's missing from it.
"The building is insured, so everything's fine"
On leased premises, the building's insurance protects the owner – the company's machinery and stock are left out of it. And for an owned building, building cover alone doesn't extend to equipment and stock: those form a separate asset group, with a separate sum insured. Details: who insures what and the three asset groups.
"The insurer won't pay anyway"
Insurers settle according to their policy wording – in most cases, without a problem. Disappointments typically stem from three sources: underinsured values (proportional settlement), a loss falling under an exclusion, or breaching the claims-notification rules. All three are preventable – and that's exactly the point of preparation. An honest look at reasons for rejection: common reasons claims are rejected.
"Our old policy is fine because it's cheap"
It might be fine – or it might just be cheap. The question isn't the premium, but whether it protects today's values and today's operation: the machinery value and stock level from five years ago may well be too low now, and underinsurance shows up precisely at claim time. That said, switching isn't always necessary: if the substance is right, an adjustment is enough – that's what the policy review is about.
"We're a small company, this isn't for us"
It's the other way round: the smaller the company, the less able it is to absorb a major loss out of its own pocket. A burnt-down workshop or a flooded warehouse isn't an inconvenience for a small company – it's an existential question. Cover can also be scaled to the size of the company – the survey helps with this too, free of charge.
"We just need paperwork for the bank, the content doesn't matter"
For financed property or leased machinery, cover really is usually a requirement – but anyone who only looks at the paperwork pays twice: once for the premium, and once for the settlement that's missing at claim time. The financier's requirement is a minimum, not a goal: the policy must protect the company first and foremost – the endorsement, however, isn't a formality: it settles who the insurer pays out to when a claim happens, so its wording needs to be checked against the finance agreement. Details: leased and financed assets.
And one more general lesson: facts are the answer to myths, and a plan is the answer to facts. The full collection of ten myths: the myth-busting collection.
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