Sheilas Wheels void insurance

mikey72

If they're under-insured, the insurer can make a pro-rata payment.
So if the contents are insured for 90% of the overall value, you should get 90% of what you're claiming.
If it's 10%, you would be voided.
The FOS will decide at what point in the middle of the two is a fair place to decide one or the other, so good luck with the complaint.

bingbong1978

boiler_man wrote: »

I don't understand why the policy was voided. If under insured, quite simply the claim payment should have been reduced. Voidance of a policy is for cases when the Insured does not supply information that ,if it had been supplied, would have made the Insurer not take on the Policy.

Not necessarilly, most insurers would void if anything below 50%. Between 50% - 80/85% pro rata and anything above normally would receive full payment but it is down to the t&c's of each policy and insurer.

raskazz

boiler_man wrote: »

Voidance of a policy is for cases when the Insured does not supply information that ,if it had been supplied, would have made the Insurer not take on the Policy.

Exactly. If Sheila's Wheels would not have offered cover had they known the true value of the contents then average would not apply and they would be entitled to void the policy if the misrepresentation was not innocent (which it clearly isn't). There is also the question of whether the misrepresentation was reckless/deliberate given the OP's admission that they only looked at expensive items when considering the sum insured! I have worked with TCF and generally they only recommend a void when they are sure that the FOS will uphold the decision.

Would this have happened if the OP used a broker? Doubtful. If you buy without advice you have to carry the can for these types of things.

Helen_J_3

This isn't fully related to OP but if I'm reading this thread correctly, are people saying that when you buy home insurance you have to add up the value of every single thing in your house? I'm not a homeowner (as of yet) but is this right?

bingbong1978

Helen_J wrote: »

This isn't fully related to OP but if I'm reading this thread correctly, are people saying that when you buy home insurance you have to add up the value of every single thing in your house? I'm not a homeowner (as of yet) but is this right?

Yes, including things in sheds/garages/greenhouses/attics. Absolutely everything needs to be included unless it falls outwith the definition of contents ie a moped or a scooter etc.

mikey72

bingbong1978 wrote: »

Not necessarilly, most insurers would void if anything below 50%. Between 50% - 80/85% pro rata and anything above normally would receive full payment but it is down to the t&c's of each policy and insurer.

Then it's down to the FOS to decide if the t&c's are fair or not.

Tammer

Hi,

I suppose the only outstanding point is how exactly does one accurately value the contents in their house to ensure that they're not under-insured?

Is there some sort of online questionaire?

bouncydog1

You go through every room in your home and list everything that you own and apply a value to it. If your policy gives new for old cover then you should be looking at how much it would cost to replace an item.

Put yourself in the situation of your house being burned to the ground and being left with nothing - how much would it cost you to replace everything. If you have a sewing box for instance, you could soon get up to £100 with the box, needles, thread, fasteners, etc. etc. Cake tins in the kitchen cupboard etc. contents of the bathroom cabinets.

People often overlook these items and don't incude them when valuing their contents but if they make a claim they expect the insurer to pay the replacement value.

boiler_man

bingbong1978 wrote: »

Not necessarilly, most insurers would void if anything below 50%. Between 50% - 80/85% pro rata and anything above normally would receive full payment but it is down to the t&c's of each policy and insurer.

I found the latest Policy wording, it does not make it clear under what circumstances they would reduce your claim or when they would void the policy. Is this Treating Customers Fairly? One of the parts of TCF is for " clear, simple and understandable information provided for, and used by, consumers" . Where the claim does fall down is that you knew that you did not provide a sum insured for the full amount of the contents. If you took out over the telephone, you may need to obtain a copy of the transcript to see what information you were asked for and how it was explained to you. However on the basis of the example of underinsurance given in Policy wording, if the underinsurance was up to 50% , you could expect a claim payment to be made.

The sum insured should represent the full replacement value. If the sum insured is less than this, you may not be
properly covered and we may reject or reduce any claim you make or your contract may be invalid and we may
even treat you as being uninsured. If we choose to reduce the claim we will only pay a proportion of the loss, which is
determined by using the following fraction:
Sum insured
/Total replacement cost
For example: £30,000
= 50% or 1/2 £60,000