MSE News: Claimants protected under insurance overhaul

educatingmyself

MSE_Martin wrote: »

It should apply to both.

Yet the key is by enshrining it in this way it should stop companies doing it in the first place - rather than relying on only educated consumers having to go to the Ombudsman

Hi Martin

How does this impact insurance claims already in progress? Is there an accepted "working towards" period that is sympathetic to the new regs?

I am in the middle of a claim that has dragged on for three years, throughout which my insurance company have tried several get out of jail cards and have just revoked my insurance because I did not declare my supported housing placements (eg youngsters pending returning to families or being taken into care) saying I take DSS and they do not insure that risk. I have a full hotel package (I have a guest house) and I do not take what I class as DSS, ie, homeless, benefit claimants who knock at the door and then claim housing benefit. This would make me like a bedsit house/HMO.

I definitely need some serious insurance advice, but where do I find that advice at an affordable price?

I hope this law assists all claimants and not before time, but what about now?

EM

chriswarwick

new to Forum and using this thread to [maybe] start a new one! I used to think (perhaps with hindsight, wrongly) that contents insurance included Personal Liability Insurance. This is not when a brick falls on the postman [!]when visiting your property, but when you are out-and-about and in a moment of absentmindedness [say] step in front of a cyclist who then crashes and breaks their leg, or worse their neck. They then sue you. I want to insure against being sued as such claims could run into many hundreds of thousands of pounds. Since I am a home owner, such a claim could ruin me. Cannot find this on any policy, nor can I find any such policy to buy - just tradesmans policies. Any ideas people?

educatingmyself

Selden wrote: »

If the Bill goes through it is likely that the new law will come into force at some point in 2013 and will NOT be retrospective. Also the Bill applies only to consumers, and from what you have said it is likely that you will be classified as a micro-enterprise. For both these reasons it is unlikely to affect your position.



Is this an enterprise which employs fewer than 10 persons and whose annual turnover and/or annual balance sheet total does not exceed EUR 2 million? If so you can complain to the Financial Ombudsman Service (click here) and that's very affordable - free in fact.

Many thanks for your comments and yes I think ultimately I shall go to the FOS, I am a small concern with 0 employees! However, in the meantime, I would like to know where I stand now and what I can do about it, before I end up bankrupt waiting around for answers? I hear the FOS take months and months?

Any ideas?

EM

lisyloo

I would like to know where I stand now and what I can do about it, before I end up bankrupt

Most solicitors will gives you a free consultation.

magpiecottage

My understanding of this legislation is that the intention is, as has been noted, an insurer should not be able to avoid a claim simply because the proposer did not declare something irrelevant to it.

Thus, if a named driver had points that were not declared the insurer could not avoid a theft claim or a claim when a "clean" driver had an accident.

What it will not do is remove the duty of utmost good faith - that applicants must declare anything it is reasonable to suppose the insurer might need to know to make an underwriting decision. The intention is to close loopholes that benefit the insurer, not to open loopholes that benefit policyholders.

educatingmyself

Selden wrote: »

I think you may have misunderstood. The new regime will be very similar to that currently operated by the Ombudsman, though with rather more precise use of terminology. In short:

1. The consumer will be under a duty to take reasonable care not to make a misrepresentation to the insurer (clause 2(2)).
2. The duty of disclosure is abolished for consumers - if the insurer wants to know something it should ask a suitable question (clause 2(4)).
3. Basis of the contract clauses are rendered of no effect in consumer insurances (clause 6(2)).
4. If an insurer is induced to enter a contract by a deliberate or reckless misrepresentation made by the consumer in breach of clause 2(2) then it may avoid the policy and reject claims as at present (clauses 4 & 5, Sch 1, para 2(a)). There is also some welcome tidying up on the effect on the premium (Sch 1, para 2(b)).
5. If an insurer is induced to enter a contract by a careless misrepresentation made by the consumer in breach of clause 2(2) then its remedies are dictated by what it would have done had it known the true position (clauses 4 & 5, Sch 1, para 4). If it would not have taken the risk it can return the premium and avoid the contract (Sch 1, para 5), if it would have offered different terms those terms can be read into the contract (Sch 1, para 6), if it would have charged more it can proportionately reduce any claims payment (Sch 1, para 7).
6. If an insurer is induced to enter a contract by any other type of misrepresentation - essentially what we would currently categorise as "innocent" - it is not a "qualifying misrepresentation" and the insurer has no remedy (clause 5).

The Bill does not do away with the duty of good faith but it explicitly modifies it to the extent necessary to achieve the above (clauses 4 & 5).

Hello Selden

Please can you confirm what is categorised as "innocent" or a "qualifying misrepresentation"? My insurance has just been stopped because I did not declare a material change in my circumstances! I have been in a long drawn out flood insurance claim in my guest house, (I have a hotel package, buildings and contents), which was my home. During the last three years as this has dragged on, I have been unable to operate as a guest house as my dining room, kitchen, lounge, laundry and office were all in the basement, which was flooded. Latterly, I took in some care placements, eg, foster type placements, respite care, domestic violence, mental health, learning difficulties etc, paid for by various depts of the County Council. This I have openly declared at the various meetings with loss assessors, adjusters etc, but suddenly they had said they have cancelled my policy, without explanation, and after enquiring with the broker, it appears that "I am living on site with 3 DSS people" and they do not insure that risk!

Can they do this? Firstly, I have not been living there for the past 8 mths due to ongoing works, secondly, there is no legal entity called the DSS, thirdly there is nothing in my original policy document, nor renewals excluding such people, if there is such a legal definition and fourthly, my interpretation of "DSS" was homeless people who knock at the door and ask for a room for which they would claim housing benefit. These I never accepted, because HB in these circs would only pay single room rate, which would be less per month than I charge for a week, so not helpful to either side! Is this allowed? Can I complain? Who is responsible to ensure this investigation was conducted properly and discussions with me took place before it was deemed that I was living in a place I am not and with people I am not?

Many thanks in anticipation.

EM

educatingmyself

Selden wrote: »

Check your policy document, but there is quite likely to be a condition entitling the insurer to cancel it at x days notice.

Cancellation differs significantly from avoidance for non-disclosure or misrepresentation. In particular its effect is not retrospective, so that any claims arising prior to cancellation may still be pursued.

Many thanks Selden

Yes it was cancelled with 30 days notice as per ...... in our T&Cs etc, but with no explanation or evidence of why!

I spoke to the broker who cannot find me insurance elsewhere, based on my present insurers information about my change in circumstances! That is to say nobody has actually given me written proof of anything, and I have asked. The broker read a brief bit out of an email from the ins co, but would not give me the name of the person who sent the email. Nor can they re-insure me elsewhere and have not even considered whether what they are being told is correct!

After all, living on site with 3 DSS people and not actually living at the property at all, is quite wrong, let alone 3 DSS. Also, without a legal definition of DSS, how can they do such a thing? After all I cannot just decide one day on a whim, without explanation to cancel my policy and stop paying, I am party to a contract!!!

Surely they must prove what they are basing their decision upon?

EM

educatingmyself

Selden wrote: »

Check your policy document, but there is quite likely to be a condition entitling the insurer to cancel it at x days notice.

Cancellation differs significantly from avoidance for non-disclosure or misrepresentation. In particular its effect is not retrospective, so that any claims arising prior to cancellation may still be pursued.

Just a thought, if they get away with cancelling for alleged 3 DSS living on site with me, which is untrue, can they try to avoid by applying back through the years who I have or have not had staying at the guest house?

Surely I cannot be expected to check every person who stays with me to make sure they are not DSS claimants?

EM

[Deleted User]

As the legislation is not retrospective, it will be well worth cancelling all your policies and reinsuring once it comes into force...