Insurance claim - new for old

CharltonSE7

Following a burglary earlier this year, my insurance company is offering me 'new for old' from suppliers of their choice. If I decide to take a cash alternative, they are planning to take around 20% off the value of each item. What a rip off, but not surprised by that....

However, I had a lot of jewellery stolen, including four inherited pieces from my grandmother. I appreciate that the company has to estimate a replacement value in today's marketplace, but I don't want to go to H Samuel or similar to get a replacement. One of the pieces dated from 1851 and had huge sentimental value. Under these circumstances, I don't see why I should accept a 20% cut in value just because I don't want to use their jewellery supplier.

Any thoughts/ advice?

lisyloo

Are H.Samuel in a posistion to provide a "suitable" replacement of the same value and quality etc.

If they are then I would say that you are not at liberty to dictate to your insurance company just becuse of your own personal prejudice.

However if they are not able to provide a replacement of the same standard or quality then I don't see why you should take a reduction.

You options would be to
a) explain the situation and try to resolve it with the insurer.
b) if that fails complain formally and take it through their complaints procedure.
c) if that fails take it to the insurance ombudsman.

mostly the ombudmans type of organisations tend to be independent and fair, but if you really fell unfairly treated after that then use the small claims track in the county court.

FlameCloud

Sentiment has no place in insurance. An item has a financial value, and if they can replace it theres not alot you can do.

Insurance companies dictate how they will settle claims (in my companies case its Repair/Replace/cash settle, in that order) not the customer. The insurance ombudsmen will not support your case just because you dont like it.

Insurance companies deduct the same discount they get from their suppliers should you choose (and they agree crucially) from the settlement. For example, if they can get your ring priced and bought for £100, they aint going to give you its market value of £120.

However, this ONLY applies if the insurers can replace the item. If not, then you dont get the discount, as they dont in the first place.

courtjester

The real issue in these cases is always that the claimant expects the physical value of the piece (in cash terms) should be much higher due to the 'sentimental' value attached to possessions such as jewellery.

Whilst understandable, flamecloud is absolutely right that sentimental value is irrelevant but also impossible to evaluate in cash terms.

To be clear, it is not merely that insurers 'dictate' the way claims will be settled which sounds a bit harsh, it is simply a matter of what the contract (policy) states - reinstatement by replacement or cash at the insurers option.

From the insurers perspective, they will receive a discount when they replace the items hence that is the limit of their financial liability and if you request an alternative basis of settlement (in cash) then it is reasonable for the insurers to expect not to pay more than their preferred basis.

If you intend to replace the items somewhere else, you also could negotiate a discount directly with the jeweller, there is plenty of margin in their retial pricing, so again what is the true value of your loss in such circumstances if you are not to profit from such settlement?

If you don't intend to replace the items (a reasonable request where the essential value to you is the sentiment and age of the piece which a modern replacement could not evoke), then plainly the monetary value is not the fundamental factor and there should be no complaint over the cash deal offered.

You are certainly free to query whether the insurers cash evaluation is correct bearing in mind that this must relate to the same *quality* of piece and workmanship and many people consider that Samuels as a comparative source is at the lower end, nevertheless, if you want the cash, you will have to argue your case over the quality level and accept a discount applied to whatever level that is.