Cash Settlement for Building work claim on home insurance query

theJudge

Hi there,

I'm currently negotiating a cash settlement so that I can employ my own builder to carry out the work. The insurance company having been unable to produce a builder themselves.

I have a problem which I can't find an answer to. This is, that if we agree on which of the quotes to settle on, as I understand it, I would have to discharge any claim on the work and materials set out in the specification of works and bill of materials, (although any additional work that was not foreseeable could still be claimed for). However, I would not have signed a contract with the builder at that stage, and he may not wish to proceed or the final costs may exceed his original quote. 10-15% being typical, apparantly. So, if I settle for the quote amount, I could end up 10-15% out of pocket.

How do I handle this?

huckster

I don't see why a final invoice should be 10-15% more than what was quoted. The contractor should allow for any unforseeable work, using their experience of handling similar types of work.

I would expect to be quoted properly for the job, with any quote specifying exactly what work would be done. The Insurers would I am sure, work on the same basis.

If you contract the works yourself, then any disputes would be between the youself and the contractor. This is why many people prefer to submit the quotes to the Insurers and ask the Insurers to pay the contractors direct. Then if the contractor finds additional work or you have a problem with the contractor you can go back to the Insurers. In addition say you had some work done and three years down the line, the works are found to be faulty. In this situation if the contractor had ceased trading or could not be contacted, you could go back to the Insurers who should pay for the work to be redone. This would not be possible if the contract was between you and the contractor.

theJudge

http://www.independent.co.uk/life-style/house-and-home/property/relationships-built-to-last-how-to-find-a-builder-wholl-finish-on-time-and-on-budget-2125587.html

I would also hope to be quoted accurately for a job. However, life doesn't always work that way and as explained in the above article, it's recommended to keep a 10-15% contingency. My quote has a few notes in it which would allow for more money to be charged for overrun on labour and for any materials not included in the quote. Obviously, even for a relatively small building project, there's likely to be a few things not originally thought of, it could end up higher or lower than the suggested amount.

Thanks for the tips on asking the insurer to pay the contractor directly. I doubt very much that the contractor would be happy with this suggestion, knowing what slow payers the insurance companies are.

Given the hassle that I've had dealing with the original claim, I don't think that the "warranty" that the insurance company may give me, if I was stupid enough to want to stay with them would be worth anything. Have you heard about PPI?

Here's a case study from the FOS on how repair, replace or cash works:-
http://www.financial-ombudsman.org.uk/publications/ombudsman-news/10/oct-repair-replace-cash.htm

Doesn't cover my concern, however, but does show that I can claim for project management costs and possibly for distress.

mexicanhat

Can't really see that this will be a problem. If the builder is specific on exactly what he will be doing then any additional work can be referred back to Insurers. Would suggest that you let them know as soon as any further work is found to be necassary. Take photos of the additional damage. If your contractor has detailed contingent costs then you could ask Insurers to agree in principle that the additional charges are acceptable for the work to be undertaken. The builder should not need to charge for additional materials and so on unless there is additional damage.

If you contrcator is VAT registered then it is likely that you will need to send in the VAT invoice once the work is completed to reclaim this element of the costs, you could send them the details of the additional costs at the same time.

In relation to the FOS, the case relates to someone who has had to live in a property for an extended period of time as a result of an approved contractor failing to deliver. It does not follow that anyone who has damage should be entitled to such costs.

Hope that you get it all resolved shortly

FlameCloud

Even if the insurer pay directly- i.e. issue a cheque in their name and send to you they still will not take responsibility for the work- you choose them and appointed them.