Cash payout on home insurance claim

whizzkid001

Just a quick question hopefully. What would happen in the scenario that you get an insurance cash payout for flooding damage but then have to move before you do the repairs - I presume once agreed the claim is to be settled by a cash payment, the money is yours and if you moved before doing it the money remains yours. Any thoughts?

Quentin

You can spend a cash settlement how you like. Obviously any arrangement regarding subsequent VAT recovery by way of submitting VAT receipts won't be honoured if there are no receipts to send in!)

whizzkid001

Quentin wrote: »

You can spend a cash settlement how you like. Obviously any arrangement regarding subsequent VAT recovery by way of submitting VAT receipts won't be honoured if there are no receipts to send in!)

Ok, that's what I thought. In my case, I had to wait 3 years for the ombudsman to rule in my favour. Well, I received a cash payment some time ago now but recently read on their website that they should also award 8% simple interest on top of any payout, paid from the date of the original claim to the date they finally pay out (ie 3 years interest) - see http://www.financial-ombudsman.org.uk/publications/ombudsman-news/33/awards-33.htm

My insurer refused so I've now had to take the case back to the ombudsman. Anyway, the adjudicator has found against me on the basis that:

1) I haven't suffered any financial loss ie I don't qualify as I hadn't forked out myself to have the repairs done and

2) had my insurers paid this settlement at the start of the claim, I would have had the repairs done shortly afterwards anyway (his presumption), thus I haven't actually been 'deprived' of any money.

I say his reasoning is utterly wrong - the award of interest is simply for the 3 year delay in paying the settlement, as their website states. So I propose giving him my original scenario, to say well what if I had chosen not to have the repairs done or what if I had moved before the repairs were done - in those scenarios I WOULD have been deprived of the money which would have earnt interest had I been paid it 3 years ago!

If anyone has any further thoughts/arguments, please feel free to add.

InsideInsurance

Did you open a new complaint or reopen the old case?

Did you sign the ombudsman letter that you were accepting their adjudication in settlement of the complaint?

When did the ombudsman make the ruling?

This all needs to be tied back to the original complaint but I suspect it is too late and you've probably already signed the acceptance letter. In which case there is probably nothing you can do about the complaint about the insurer but you could complain about the ombudsman themselves if you are still within the time limit

whizzkid001

InsideInsurance wrote: »

Did you open a new complaint or reopen the old case? New complaint

Did you sign the ombudsman letter that you were accepting their adjudication in settlement of the complaint? N/a

When did the ombudsman make the ruling? on original complaint, last year

This all needs to be tied back to the original complaint but I suspect it is too late and you've probably already signed the acceptance letter. In which case there is probably nothing you can do about the complaint about the insurer but you could complain about the ombudsman themselves if you are still within the time limit

No, this is a completely new case so no worries there.

InsideInsurance

It is a worry because it is not the insurer that should have added the interest but the ombudsman when they decided what the appropriate compensation/ resolution was.

Did you sign the letter on the original complaint saying that the £X and whatever action was full & final settlement of the complaint?

whizzkid001

InsideInsurance wrote: »

It is a worry because it is not the insurer that should have added the interest but the ombudsman when they decided what the appropriate compensation/ resolution was.

Did you sign the letter on the original complaint saying that the £X and whatever action was full & final settlement of the complaint?

No, let me explain. What happened was I ultimately won the actual complaint over whether the insurer was responsible for the claim or not. That was done and dusted a year ago. Then 6 months ago I discovered from the ombudsman website, they should have added 8% interest for the 3 years I waited for the settlement. When insurer refused, I went back to the original ombudsman to ask what I could do about it. He said that as they did not know at the time whether there would be a cash payout or not, the question was not applicable. At his suggestion, I then raised a completely new and separate complaint which was duly accepted and to which I have just had rejected (at least by adjudicator, it has yet to go to an ombudsman). This is what I'm asking advice on now.

InsideInsurance

I understand what has happened at that level.

Did they make the insurer pay any compensation in addition to telling the insurer to settle the claim?

How the claim is settled would make no difference to the fact of if interest is payable or not. I personally would have raised a complaint about the ombudsman themselves for having not instructed the insurer to pay the interest on top of whatever the settlement was but that would depend in part on if you were given compensation for the delays etc.

My concerns are that (1) it is beyond the limit to raise a complaint and (2) you signed the letter advising you were satisfied with the resolution. You may be able to get round both on the grounds of not knowing but it's fairly thin

whizzkid001

InsideInsurance wrote: »

My concerns are that (1) it is beyond the limit to raise a complaint and (2) you signed the letter advising you were satisfied with the resolution. You may be able to get round both on the grounds of not knowing but it's fairly thin

Well I've already gotten past that stage now, they've already long accepted a second separate complaint and an adjudicator has now ruled against me. I now have the option to ask an ombudsman to rule on it. Just need to find some sound argument/s against their reasoning for saying I'm not entitled to interest.

Quentin

You aren't "entitled" to "interest" for the reasons they have given.

What you should have been asking for was compensation for the three years you had to live in the property awaiting the insurer being forced into doing what they should have done at the start.

hugoshavez

Did you move house or not? Were the repairs done, or have you just left the house to rot?