Contents insurance - help

sarahgail

We had our house burgled about 10 weeks ago. I obviously immediately called our insurer, Sheilas Wheels, to log a claim. Luckily, we didn't have too much stolen so the claim would have been in the region of £2000, however there were sentimental items taken, such as my husbands wedding ring. The insurance company sent out a loss adjustor, who stated our contents cover was too low so we had to fill in a form detailing everything in our house. It turned out we were 50% under-covered, which we were really shocked by. It was a genuine mistake.

We have just received a letter from our insurers (they took their time) stating they are declaring our policy as void and will refund our premiums and that's that - no pay out for our theft and we must now declare that we have had a policy cancelled so may struggle to get cover now. I am heartbroken! :-(
We cannot afford to replace everything that was taken. :-(

Can they do this? Is there anything at all I can do? I could understand them not paying out if we had claimed thousands and thousands, but in the grand scheme of things it isn't a huge claim and we made a genuine mistake.

Any help or advice would be appreciated.

Thanks

Quote

No idea if they can or can't do this. The only thing I thought they might do is apply average to the claim settlement and/or expect you to pay any additional cost towards increasing your contents sum insured to the "correct" level. I'm not sure the "genuine mistake" excuse will hold much water.

sarahgail

We thought the same, worst case scenario they might pay us a reduced amount and increase our premiums.

I know the genuine mistake thing probably wont hold much water but it's not like it was deliberate or a fraudulent claim or anything

I really really don't know what to do. :-(

The reason they thought we were under insured is because the loss adjustor said it was low for the size of house - why didn't the insurance co question this when they issued the policy??

patchy987

first off , you should always make sure you insure for the correct amount but this can be hard to judge so its always best to overestimate the amount needed.

secondly, when i worked for an insurer, the way we would have handled this is to pay a percentage of the claim depending on the actual figure insured and the figure it should have been, also the cover would have to be increased and any additional premium paid .

you should contact them to see why they have decided to declare the policy void as this doesnt seem fair to be honest.

it may be worth speaking to the insurance ombudsman too

patchy987

sarahgail wrote: »

We thought the same, worst case scenario they might pay us a reduced amount and increase our premiums.

I know the genuine mistake thing probably wont hold much water but it's not like it was deliberate or a fraudulent claim or anything

I really really don't know what to do. :-(

The reason they thought we were under insured is because the loss adjustor said it was low for the size of house - why didn't the insurance co question this when they issued the policy??

the size of house isn't always a way to estimate the sum insured, for instance 2 adults living in a 4 bed house wouldnt have anywhere near as much as a family with 2 adults and say 3 grown up kids at home, can you prove the amount you insured for was a true figure of what you actually own,

if only 2000 has been taken then try to add up the rest of the contents in the house and if you still think you are properly insured then raise a dispute

dacouch

I've seen a few of these problems with Sheila's Wheels, they assume a very low sum insured when they provide a quote and to find out how much they have quoted you for it takes a bit of digging in their quote details. For instance I just ran a quote through for a 3 bed semi in the home counties and they have quoted for £21900 which is well well below the average home's requirements which are generally taken as being circa £43000.

They do this so they can offer a cheap premium to hook people in, they must fully know the implications of it and I would not be surprised if they check for under insurance on every claim they get over say £1000 as they know a very significant amount of people will be under insurance.

It's a bad business practice in my opinion, if you are going to assume a sum insured at the very least make it very very clear and also assume an amount above the national average.

dacouch

Sarah how did you buy your policy with Sheila's Wheels, did you buy it over the phone, using a comparison site or directly from their website ?

Also how long have you been with them ?

FlameCloud

In my experience every insurer has a different 'pet peeve' and Esures/Shielas is definatly underinsurance and sums insured.

At a rough guess they believe the underinsurance to be of a level that it cannot have a been a genuine mistake and that you deliberatly misled them into accepting a risk they would not have accepted.

Rainmaker_uk

You could consider emailing WatchDog as if they are 'knowingly' selling insurance with a lower than average limit and then seeking to prove this to invalidate the claim then this is bang out of order and should be made public...

dacouch

FlameCloud wrote: »

In my experience every insurer has a different 'pet peeve' and Esures/Shielas is definatly underinsurance and sums insured.

At a rough guess they believe the underinsurance to be of a level that it cannot have a been a genuine mistake and that you deliberatly misled them into accepting a risk they would not have accepted.

I agree, however try running a quote through for your own home and see what laughingly low sum insured they automatically assume.

The figures for claims they have rejected for under insurance could make interesting reading

tifo

raise a dispute with the insurer and then take it to the ombudsman.

they seem to have deliberately missold an undervalued policy and then taken harsh action to protect their interests.