Underinsured

A person or asset is considered underinsured when the sum insured (coverage amount) is less than the actual value of the risk or loss. This can result in out-of-pocket expenses during claims.

Underinsurance is common in health insurance, property insurance, and vehicle insurance.

Why Underinsurance Happens

• Choosing lower premiums
• Not updating coverage over time
• Underestimating asset value or medical costs

Why Being Underinsured Matters

• Financial burden during emergencies
• Partial claim settlement
• Increased personal risk

How to Avoid Underinsurance

• Review policies regularly
• Choose adequate sum insured
• Adjust coverage for inflation and rising costs

Underinsured vs Uninsured

• Underinsured: Partial coverage
• Uninsured: No coverage at all

"If your health insurance covers ₹5 lakh but your medical bill is ₹10 lakh, you must pay ₹5 lakh yourself—this is being underinsured."