If a policyholder is insured for a greater declared value than is necessary, the policyholder is overinsured. The main consequences of overinsurance is that the policyholder is paying too high a premium. Conversely, underinsurance refers to a situation whereby the declared value is too low. If this is the case, the insurer may refuse to pay a claim in full. Over or underinsurance is avoided through regular reinstatement cost assessments and engaging the right practitioner to yield accurate figures.