In Polish: Niedoubezpieczenie
This is the word you will see in bank documents.
Definition
Underinsurance means the sum insured in the policy is lower than the actual value of the flat or house. The sum insured is the upper limit of the payout, so after total destruction you receive at most the amount in the policy and cover the rest of the rebuilding yourself.
What it means for you
With a mortgage, the bank is usually satisfied with a policy for the loan amount, even if the flat is worth more. Such a policy protects the bank, not you. You can insure the property for its full value and assign the policy to the bank only up to the loan amount: the bank must accept a policy with a wider sum and scope if it carries the required assignment.
Full entry in Polish, with a worked example and sources
Frequently asked questions
What is underinsurance?
It is a sum insured lower than the actual value of the flat or house. After total destruction you receive at most the sum in the policy and cover the rest yourself.
Is a policy for the loan amount enough?
For the bank usually yes, for you not if the flat is worth more than the loan. You can insure it for its full value and assign the policy to the bank up to the loan amount.
How does first-loss cover differ from the proportional rule?
With first-loss cover the damage is paid in full up to the sum insured. Under the proportional rule the insurer reduces the payout in the same ratio as the sum insured falls short of the property's value.
Related terms
Definitions are simplified and reflect Polish law and bank practice as of October 2026. Details
Where every word matters, the Act and your loan agreement decide. Figures in examples are indicative and are not a bank offer. The Polish version of each entry has worked examples and sources.
Other terms in “Loan costs and insurance”