Please help - Norwich Union taking the Mick!!

Tomthumb

I am sooooo angry and really hope someone can give me some advice.

I have a very small (struggling) shop selling ex high street clothing. I have built up a nice amount of stock over the past 18 months and as it is quite hard to get hold of you have to buy items as and when they become available.

4 weeks ago someone threw a brick through the window and covered a lot of stock in glass.

I put in a claim for the window (paid the £250 excess) and claimed £780 for the clothes (listing every item with corresponding invoices) I was also told to claim for loss of earnings based on the average last year.

They asked for the clothes to be boxed up and sent to them so I sent them off.

Today I have received a phone call offering me £500 for the clothes and 30% of the days earnings. I queried why I wasn't getting the full amount for the clothes and they said that it was because they may not have sold and some were 'last seasons' ???? Obviously, I am only claiming on the cost price of the items (all under £5 each) and not the potential retail value so I really don't understand this. We are not a high fashion boutique, we don't have 'seasons' otherwise I wouldn't be buying EX High Street clothing. :mad: They revised their offer to £550 - £600.

I still asked why I wasn't 'fully' insured and not able to claim for the lost items and where the policy states that items depreciate in value. Cue long wait on hold then she came back and told me they would pay the full amount if I was able to obtain the exact same items?!?!?! How the hell am I supposed to do that - I can't always get the same items purchased last week let alone months ago!!

I am so angry about all of this and don't quite know what to do now, I really thought that I was insured for the cost price of the items and I am worried that if something like this should happen again in the future I will not be fully insured as my stock doesn't have a fast turnover.

If anyone has any advice, I'd really appreciate it

mattymoo

Whilst it is not possible to view NU commerical policies online, I suspect that the schedule will show general contents are covered on a reinstatement basis (new for old) and that stock is on an indemnity basis - e.g. the cost price to the trader.

By offering a lower price, NU are failing to indemnify you, the policyholder. Essentially, insurance is a promise, subject to terms and conditions, to indemnify / reinstate (depending on cover) the policyholder in the event of a claim. So that is one argument to put to them.

Secondly, they appear to be underwriting your business at the claims stage, not at inception. When you purchased the policy did you explain (or did your broker explain) that you were selling end of line, overstocks, bankrupt stock (whichever applies) clothing? If so, then they should have made clear at that stage (when you took the policy out) that they would make deductions for this and that. To try and do this at the claims stage is a big no no.

If you have a broker, you need to involve them. If not (NU used to sell commercial polices direct but not any longer), then it is down to you to put the arguments forward. Unfortuantely, the Fin. Ombudsman Service does not get involved with commercial disputes.

I suspect at the end of the day somebody at NU is being targetted with making savings in the claims paid. Many claims are overstated and policyholder generally accept this. Yours does seem to be reasonably stated though and I think once you make it clear you will not settle for less than full indemnity, they should crumble.

*MF*

Hi ...

Some thoughts ok?

1) The offer for the loss of earnings strikes me as reasonable - but are you satisfied with it?

2) I have seen posts on here from a member of staff from the Norwich Union - I hope they may see your post, and offer to help and/or another member can remember (I can't) their forum name to let you PM them.

3) I guess, reading your post, that the NUn are treating you as a "normal" (*)clothing shop and not appreciating fully the manner in which you trade, how you buy and how you sell - that's the way it reads to me anyways.

Usually, I would expect the settlement to relate to the "value" of the stock, and that is where they are coming from (again I suspect) when they talk about seasons, and such like.

Problem is, as I think you have just experienced, once they dig themselves into a hole, it can be very hard to get them to just put their hands up and say they now understand better - so far I think you have done very well tbh.

How to help???

My initial suggestion is for you to speak to a more senior person in their claims department (having asked for the file to be referred to them).

Did you buy the policy direct or use a broker? If a broker was used, ask them to get involved?

Not sure this is really helpful - but hope it helps somewhat, and that other members can add in their thoughts, ok?

(*) Don't laugh I cannot define exactly what I mean by "normal" ok - but say you were selling football shirts, and it was last years strips that were damaged, that is where I think the NuN are coimg from in their response to you - and it misses what you actually buy and sell.

Tomthumb

Thanks for replying Mattymoo I really appreciate the advice. I tried to ring my broker but they were closed so next place for a shoulder to cry on was here I will definitely ring them tomorrow, I'm so upset about this, it was bad enough turning up to a smashed window and £250 excess without the insurance company making me jump through hoops.

Tomthumb

Thanks MF - I told the lady today that I needed to go away and get advice and I couldn't speak to her anymore (was too frustrated/angry/upset...) I'm really hoping now that my broker can deal with it for me, if not I will take your advice and ask to speak to a supervisor. It did all seem like she was clutching at straws for excuses as to why they wouldn't pay out the full amount but we were just going around in circles at the end.

Oscar_The_Grouch

Hi there

I recommend you write a letter of complaint to NU. Ask them to immediately send you the payment they have offered, so that you can use this to replace some of the stock you lost, but that you do not accept this in full and final settlement of the claim, as you intend to pursue the matter with the Financial Ombudsman Service. NU, if they have any sense, will send you the cheque.

Tell them that you fail to see why they are not meeting their obligations under the policy. Tell them that you have sent them evidence of your loss, including the actual damaged items and the original invoices for the purchase of the goods for sale and that as far as you are concerned, they have a contractual obligation to meet your claim in full or provide supporting evidence to show the validity of their offer.

Tell them that their continued failure to reimburse you for the loss is affecting your ability to trade, as your stock turnaround is very fast and the lack of funds is hampering you. As a result, you reserve the right to present a further claim for lost earnings as a result of their inexcusable delays.

I recommend you also say something like this:

I am aware of your obligations under DISP 1.6.2 (R) and that you have up to 8 weeks to provide me with your final, written, decision. I would not, however, expect that such a simple matter as confirming which aspects of the insurance contract you intend to rely on will take more than 2 weeks to provide.

Now I would not normally suggest this course of action to you, but the resedent Customer Services Advisor for NU on this site, Beccus, is on holiday. Usually, I would suggest you PM her and ask her to look into it for you. I do recommend you look for her post on this forum where she gives her return date from holiday, however, and PM her if you have not received an acknowledgement from NU by then.

Good luck.

Tomthumb

Thank you too Oscar - I will look for posts by Beccus now, that's really useful to know. It has impacted on my sales because the shop looks rubbish without the damaged stock and I keep having to tell people we'll be getting more in as soon as the insurance money comes - it's getting a bit embarrassing now! I bought £200 worth on my CC but I can't afford to buy more until this is sorted.

I wasn't too worried about the days loss of earnings, I just thought it would be the whole amount (it was only about £80)

Is it too early to start on the wine? I feel like I need it after today!

mattymoo

Thanks for clarifying the FOS angle on complaints from business's Oscar. I hadn't realised certain small businesses could use the service. More info here.
http://www.financial-ombudsman.org.uk/faq/answers/complaints_a9.html

Oscar_The_Grouch

Thanks Matty. I should have made it clear in my post that there was the limit on turnover for business complaints to the FOS.

mattymoo

Tomthumb - did you manage to speak to your broker? Any developments?

[Deleted User]

Hi Tomthumb

If you would like to email details over to me my email address is rebecca.sibley@norwich-union.co.uk, I'll be back in the office on Monday and will investigate for you.

Becca