Why you should insure your property according to market value?

When you buy a Motor Insurance, it is necessary to insure according to the current market value of the vehicle. 

If insured sum is less than market value

• In case of an accident or total loss, insurance company will pay the claim pro rata basis of the market value. Therefore you have to bare the balance part of the claim

If insured sum is higher than market value

• Insurance company will pay the claim based on the market value of the vehicle irrespective of the insured value although you may have to pay a higher amount as the premium