Home insurance claim amount reduced by Adjuster

Funkar

Hi there,
Need help, URGENT!!
We had fire in one of our rented properties (flat). Building insurance is with Towergate and Certo Claims are handling the claim for them.
They allow us to get the works done after choosing one quote out of the three provided by us.
Initially, Certo rep who came in for viewing raised the point that dead lock is not engaged while fire happened as the tenant was out to pick the kids up from school. In response I scanned the policy page where it says dead lock must be engaged in case of theft or burglary. This point wasn't raised again after this.
At the end of works done, the total breakdown was like this;
Building works cost: £2340.00
Boarding and locking up invoice: £85.00
Total Rent loss: £2078.57
Total Amount: £4503.57

Now, after 3 weeks, I received an email today which is copied below.
All of the enquiries regarding your claim have now been completed and insurers have confirmed that we can proceed.

I am able to agree the costs incurred at £2,425 (Buildings) and £2,078.57 (Loss of Rent).

However, the buildings sum insured at £56,332 is inadequate and should have been in the region of £79,000 (please do not take this figure as an absolutely accurate figure for reinstatement. I would suggest that you obtain a professional valuation). Therefore the policy condition of average will apply as detailed below:

Sum Insured: £56,332
Value at Risk: £79,000 x (Loss - £2,425) = £1,729.18

Plus loss of rent at £2,078.57 = £3,807.75 less policy excess £100 = net total of £3,707.75.

I trust that you find the above to be in order and look forward to receiving your acceptance of same to enable this matter to be brought to a conclusion.
Regards,

It reminded me that Certo Rep asked me once that sum to rebuild the flat is mentioned £56000 which should have been £79000 according to the size of flat (as total Square |Meters). I checked it with my wife as she purchased this policy over the phone and she said that she was asked by tower gate rep that how much would it be to rebuild the flat? and my wife said that it cost us £112664 to convert the property into two flats so let’s just make half of it. The property was convert into only 5 years ago. She had no idea how important and technical this question and answer could be at some point of time.

Now, it is approximately £700 less than what it cost us. I don’t want to let this £700 away as I have spent nearly £9000 on the property altogether after fire coz it was only building and no contents.
What I want to ask now is;
Are they right on their point?
Do I have any chances to get all the money?
What shall I do??


This is my first thread; I hope there is someone who can help me.
Many Thanks.


:mad::mad::mad:

InsideInsurance

By the sounds of it your wife undervalued the rebuild cost and you didn't spot it when checking the documents that came through.

Averaging is a standard insurance clause and they appear to be applying it correctly. The only real grounds of disputing it would be to get a suitably qualified person to give you a report for the rebuild value and if it is below the £79,000 they have estimated then submit it to Towergate for them to adjust the averaging

Funkar

Thanks for the quick reply,
Lookslike i am facing a reduction of £700.
independant survey will cost around another £300 aprox and no guarantee he will alue less than 79k.
I didn't really understand the value of 'LOSS' though in;
£79,000 x (Loss - £2,425) = £1,729.18.

InsideInsurance

In short, the "loss" is the amount you are claiming

In long, what they are saying is the sum is:

Sum insured divided by Actual value and that result times by the Claimed amount (aka loss)

So in your case:
56,332 / 79,000 = 71.3%
£2,425 * 71.3% = £1,729.18

So because you only insured your property for 71.3% of its actual value they will only pay out 71.3% of your claim

Funkar

i c.... got it now.
Thanks for your time.
Cheers and thumbs up for you.

SallyG

Thanks for this useful information.
Is the amount insured/rebuild value shown on the buildings insurance documents?

dacouch

If you think about it logically, if it cost £112664 to convert an existing building into two flats. Then the £112664 does not include an amount to rebuild the existing structure that was there before you converted it into two flats.

Even £79k sounds cheap to me to rebuild half a flat or if multiplied by two £158000 is not a lot to rebuild two flats, although if the loss adjuster is saying £79k then it would be fairly accurate.

Personally I'd be looking to over insurer on half a flat at least £90k just to be on the safe side

Funkar

Yes, Rebuilt cost is shown on the insurance policy document.

rs65

Funkar wrote: »

Looks like i am facing a reduction of £700.

Look on the bright side, you have been saving on insurance costs for a few years.

chanz4

just knock it off the lost rent figure