As brokers, we are all seeing the same thing. Premiums are rising and clients are looking for ways to reduce costs.

The easy conversation is reducing the sum insured.

The harder conversation is explaining the risk that comes with it.

We recently reviewed a property where an online calculator suggested a rebuild value of $600,000. The owner recognised that seemed low and insured for $1 million instead.

When a major loss occurred, the actual rebuild cost was $1.6 million.

That's a $600,000 shortfall.

When clients face increasing premiums, our role is not simply to help them spend less. Our role is to help them understand the trade-off they are making. Reducing cover may lower the premium, but it also shifts risk back onto the client.

A better approach is to first ensure the rebuild value is accurate, then explore alternatives such as increasing the excess if savings are required.

The question after a claim is never whether the premium was cheaper.

The question is whether there was enough cover.