A DISASTER WAITING TO HAPPEN
Last week, a colleague had a conversation with an insurance company’s so-called “Approved Repairer”, concerning a claim they had prepared a cost for, which based on insurers rates for the reinstatement work, we considered to be woefully low. As a company that works for the policyholder, we were concerned the works could not be completed at the price quoted, and that the policyholder would be left with either sub-standard workmanship or having to fund part of the reinstatement work themselves.
The response we got from the builder to our question over their quote was “Yes we will do the works at the price quoted, as we have a contract with insurers to carry out the works at the rates they provide. WE WILL HOWEVER LOSE MONEY ON THIS CASE”.
Alarm bells began to ring in my ears at hearing this! Essentially, the contractor was saying that he does the smaller claims at a loss and offsets this against the money he makes on the bigger claims, and relies on volume of work provided to make any profit.
Now, as a building company authorised by the Financial Conduct Authority to carry out Claims Mediation, we decided to look in to this practice in further depth to establish how it will affect the policyholder.
The problem for the policyholder starts with the wording applicable, and how insurers propose to settle the claim, and in particular if they propose a Cash Settlement. The particular policy wording in this particular case stated that if a cash settlement was proposed then insurers would limit their liability to the sum that their “approved repairer” would carry out the works for, which in this case we know was not sufficient to complete the reinstatement to a reasonable quality.
So it appears that we have just opened a big can of worms. It seems that Insurance companies are offering cash settlements to policyholders knowing full well the reinstatement works cannot be carries out at the figures quoted!!
In our view, this practice is not ethical or moral, and would strongly recommend that policyholders NEVER accept a cash settlement from their insurers based on their "approved reparier’s quote".
We also recommend that you should NEVER ACCEPT the "approved repairer’s" quote without getting your own independent survey and reinstatement quote to compare it with.
If you have had a claim, or indeed you are in the middle of a claim, and you are uncomfortable with how it was settled please call us and we will be happy to discuss it with you and advise you.
Could this "miss-settling of claims" be the next PPI scandal?
Good claims handling is not settling claims as cheaply as possible. It is dealing with a claim within the policy wording, fairly and swiftly. You never know, if claims were dealt with fairly and swiftly policyholders may even renew!
Know your rights when it comes to appointing your own Buildings Surveyor in the event of a buildings insurance claim
Over the last few weeks, we have experienced a worrying and growing trend, where buildings insurance companies are trying to force claimants to use their own surveyors to assess the extent of the damage, denying the policyholder the right to appoint their own independent surveyor. This is being done in an attempt to save themselves money on the surveying fees, and also to allow them to take short-cuts on the reinstatement work and wriggle-out of paying for the work to be done properly.
There is a section included in most insurance policies entitled “Professional Services”. Generally this allows for policyholders to appoint professional service companies to act on their behalf in the dealing with a claim. For example, it will allow for a qualified building surveyor to be appointed by the policyholder to act on their behalf following a serious claim, to ensure that the true extent of any damage is found and noted, and that the correct reinstatement work is then carried-out to ensure that the property is put back to its pre-damaged condition.
Flood victims, following the recent severe flooding in the Thames Valley region for instance, should be able to appoint a qualified surveyor to act on their behalf with the dealings with all parties associated with the reinstatement work. The cost of the surveyor is covered by this clause in the insurance policy, and generally agreed at the start of the claim process.
One very large and well known insurance company recently turned down a request for a surveyor to be appointed following a serious flood at a policyholder’s property on the basis that “the surveyor was merely preparing a schedule of reinstatement works and this is excluded under the policy”. This stance was robustly challenged by us, and after a month of procrastination by the insurance company, they finally accepted that the policyholder did indeed have the right to appoint a surveyor under the terms of the policy, and that this would be covered. No apology was ever made by the insurance company for their stance or the time and money that was wasted as a result.
Another large “household name” insurer when recently confronted with a policyholder wanting to use their own surveyor, refused to agree to the request, simply stating “we would expect a building company to scope the works required”. When pushed on this, the personal Claims Advisor maintained the stance. It was only when our professional claim team challenged them and asked if there was a Professional Services section in the policy wording, that they finally agreed that cover was in place for this, and they would cover the cost of the surveyor.
These activities are woeful, and the companies involved should hang their heads in shame. These are recognised household names and we are of the opinion that this issue should be raised with the appropriate authorities and indeed Government.
The appointment of an independent surveyor, particularly in respect of a large claim, such as a flood or a fire at a property, is there to protect the interests of the policyholder, and to manage the whole reinstatement process through to completion. It is a vital safeguard that is there to ensure that the insurers abide by their obligations, and the public need to know that they have these rights.
If your insurer has denied you the services of a building surveyor or you are having problems with getting your claim agreed or are in dispute with your insurers on the scope of the claim (what is and isn’t covered), then please do contact us as soon as possible. Our help is FREE, and we work on YOUR behalf.