As you can imagine, this can sometimes come as quite a surprise. It also means that ANY payout could be reduced by the amount the property is underinsured. So for example, if you had a £50,000 claim, and were underinsured by 25% then the insurer would only be required to payout £37,500.
This danger is exacerbated by high rates of inflation. If the cost of resolving a claim increases (whatever the factor), then your previous insured amounts might not be suitable.