What effect, on the other hand, does overinsurance have?
Over-insurances can for instance arise, if the original acquisition value is removed from the sum insured on the dismantling of a machine – instead of the current replacement value of a similar machine or the extrapolated value. If this happens more often, the sum insured will gradually increase.
However, since your premiums are based on the sum insured, you systematically pay too high insurance premiums in this case.
In the event of damage, however, the insurance company will only replace the maximum amount of damage discovered, regardless of your high insurance premiums.