Underinsurance

According to The Office of National Statistics, The Consumer Prices Index rose by 6.2% in the 12 months to February 2022, up from 5.5% in January. On a monthly basis, CPI rose by 0.8% in February 2022, compared with a rise of 0.1% in February 2021 – the largest monthly CPI increase between January and February since 2009. The conflict in Ukraine is, no doubt, fuelling inflation; demand for materials has risen considerably as Eastern Europe supply lanes are sectioned-off. The backlash from COVID-19 has also had an impact, causing factory closures, worker absences and container shortages.

Such materials increasing in value include metals, electronics, oil, steel and copper. This is just one of the factors that drastically affect the valuation of companies, as the storage of these materials expose the companies at risk of underinsurance. It also results in damages expenses being greater as the cost to rebuild buildings has increased – with both labour shortages and materials increasing in price.

Businesses need to counteract the consequences of inflation by contacting their broker. At Romero Insurance Brokers, we will exact an accurate up to date valuation of your company. Together, we will avoid the dangers of being underinsured in the event of a claim, with your finances safeguarded against the condition on average rule.

Contact Romero Insurance Brokers today to learn more about the consequences of inflation and to receive an accurate valuation.