Fortunately, this assumption of underinsurance occurs rarely in practice, because with the Automatic Increase clauses, which allow the regulation of the sum insured at the closing of the accounts for the year, there is usually no underinsurance.

In cases where this clause does not exist or the Insureds have not notified the company or its broker of updates, either up or down, of the amounts insured, and an underinsurance is detected, there are usually problems.

The mistake that many adjusters make is to apply first the underinsurance and then the deductible, when we at VANTEVO understand that, in those cases, the franchise must be applied first and then the underinsurance.

The reason is that, although some insurers do not share it, the underinsurance must also affect the deductible, that is, the part of the claim assumed by the Insured, otherwise it would be unfairly harmed and there could be cases in which indemnity is negative.