What is "Underinsurance" for All-Risk Items?

Underinsurance is when your stuff is insured for less than it costs to replace it. If that happens, we’ll only pay out a percentage of your claim based on how much cover you bought. Example: if your watch is worth R2,000 but you only insured it for R1,000, you’ve only covered 50% of its value. So, if you claim for your watch you’ll get R1,000, not the full amount. Moral of the story: insure items at their actual replacement value, not what you wish they cost.