▁Sum ▁Ins ured ▁is ▁less ▁than ▁Current ▁Value . ▁ ▁Sum ▁Ins ured ▁is ▁the ▁maximum ▁amount ▁that ▁can ▁be ▁paid ▁out ▁and ▁is ▁only ▁paid ▁out ▁in ▁cases ▁of ▁total ▁destruction . ▁Where ▁partial ▁destruction ▁occurs ▁( a ▁more ▁common ▁occurrence ▁than ▁total ▁destruction ), ▁P ayout ▁is ▁pro ▁r ata ▁in ▁line ▁with ▁the ▁under ins urance . ▁This ▁is ▁due ▁to ▁ins urance ▁companies ▁bas ing ▁the ▁prem iums ▁on ▁their ▁risk ▁of ▁losing ▁the ▁full ▁Sum ▁Ins ured ▁against ▁total ▁destruction ▁events . ▁ ▁Build ings ▁ins urance ▁ ▁Where ▁a ▁building ' s ▁ins urance ▁policy ▁is ▁subject ▁to ▁average , ▁under ins urance ▁can ▁result ▁in ▁very ▁high ▁li abilities ▁on ▁the ▁owner . ▁ ▁For ▁example , ▁if ▁a ▁flo od ▁or ▁fire ▁causes ▁$ 3 M ▁of ▁partial ▁damage , ▁the ▁building ▁is ▁ins ured ▁for ▁$ 5 M , ▁but ▁its ▁true ▁value ▁is ▁determined ▁to ▁be ▁$ 1 0 M , ▁the ▁p ayout ▁will ▁be ▁ ▁This ▁would ▁leave ▁the ▁owner ▁with ▁an ▁under ins urance ▁short fall ▁of ▁$ 1 . 5 M . ▁In ▁the ▁case ▁where ▁a ▁building ▁is ▁listed ▁and ▁has ▁a ▁mand atory ▁re build ▁order , ▁it ▁could ▁be ▁ru in ous . ▁ ▁Under ▁certain ▁conditions , ▁if ▁the ▁sum ▁ins ured ▁is ▁ 7 5 % ▁or ▁more ▁of ▁the ▁current ▁value , ▁no ▁dedu ction ▁is ▁made ▁for ▁partial ▁losses . ▁ ▁This ▁is ▁an ▁example ▁of ▁a ▁co ins urance , ▁with