House Insurance - Null and Void on under insured

Quentin

wood1e wrote: »

@*Scarlett - Never Claimed...just phoned up to enquire as shed got robbed the other night.

Just phoning to cancel with Allianz...not worth staying with a insurance company that doesn't like paying out, if needs must.

As it is the robbers have done me a favour and stolen three strimmers none of which work! And an electric drill that doesn't drill straight!!!

If you told them your shed got robbed, then you will now have that on your record.

Meaning you must disclose it when applying to other companies for quotes as part of your claim/loss history over the last 3/5 years, depending on how long a history they ask for.

*Scarlett

woodle bathrooms fixtures, fitted kitchens are covered under buildings insurance.

Also fitted bedroom furniture - fitted wardrobes, etc.

So don't count these into your contents insurance.

I guess this is probably doing your nut in by now!

Maybe try

http://bank.marksandspencer.com/insurance/home-insurance/overview/

They seem to offer a high level of cover B £1m C £100k

HRI is £25k and single item £10k

For a mainstream insurer I would say these amounts are generous and would cover most people. But obviously it depends on the premium quoted.

Hope you get this sorted.

TurnUpForTheBooks_2

InsideInsurance wrote: »

...100k really isnt High Net Worth (never heard it called higher before) territory but is the floor at which the Mid Net Worth and HNW insurers start to enter the market. Really they are looking at people higher up the food chain and their pricing and level of cover reflects this.

Higher was my word in an attempt to save myself having to explain that £100,000 might be on the cusp of fair to middling richness, II ! You have now explained it better.

The whole market moves from fad to fad with ideas such as going into bedroom-rating and blanket sums insured and then coming out again, but generally blankets are a good place to look for sleepeasy cover I think if you are struggling because you haven't actually worked it all out rigorously.

I slept easy with a £125,000 blanket limit from Liverpool Victoria for a few years coupled with an inner limit on valuables I was happy with. The £125,000 was way way OTT but it was their minimum and amazingly it was actually moneysaving compared to many sum insured rated quotes with much much lower contents sums insured.

I gave it up after about 4 years I think because it was creeping up at about 10% per annum and I managed to peg premiums back to the original level by changing insurers.

Currently I am back on a sum insured basis.

Blanket insurance doesnt absolve you of needing to calculate your contents value as there are very few unlimited contents and even those that do exist still require you to set an inner limit on valuables/ high risk - though this at least makes it easier to manage the list of items. Going for the highest limit possible isnt very MSE and again can result in fraud investigations

So yes I agree particularly on the subject of the limits on valuables (it is essential that you check exactly what each insurer means by that word too). But if you find one that appears like it might fit in many respects, then don't be shy to try it for size, HNW or higher (yes I do think I meant lower than high )

*Scarlett, I was just about to put Thanks on your suggestion of M&S but a quick look at the policy found me staring again at the AXA name. The jury is of course still out on MSE currently vis-a-vis how they might deal with home insurance claims where limits get in the way of basic principles.

wood1e

Thanks Scarlett.

So even though I am not going to claim? I will have to notify new insurance company that my shed got robbed?

And on the basis of your Legal and General wizard £75,000 is more than enough, as I am including Bathroom and kitchen replacement.

Just incase I under valued a pair of a wife's knickers of something dissimilar.

Spikey1

Hi Wood1e,


If your sum insured was grossly low and there was evidence that you had submitted this deliberately or recklessly then the policy could be null & void...including the Buildings cover if this was purchased under the same policy number.


Cases like that are very rare in my experience.


If the misrepresentation was innocent and, by stating the correct sum insured, the Insurer would still have accepted the risk (which is usually the case) your settlement will be dictated by the policy terms. Sometimes this will mean a proportionate reduction, sometimes wear & tear reductions will be applied across the entire claim (so your cover will no longer be 'new for old') and sometimes you will have no reductions at all !


The buildings settlement would not be reduced though if its own sum insured was adequate.


Cheers

dacouch

Spikey1 wrote: »

Hi Wood1e,

If the misrepresentation was innocent and, by stating the correct sum insured, the Insurer would still have accepted the risk (which is usually the case) your settlement will be dictated by the policy terms. Sometimes this will mean a proportionate reduction, sometimes wear & tear reductions will be applied across the entire claim (so your cover will no longer be 'new for old') and sometimes you will have no reductions at all !


The buildings settlement would not be reduced though if its own sum insured was adequate.


Cheers

Google or search MSE or other forums for esure or sheilas wheels who appear to have a company policy of voiding policies for any under insurance in the event of a claim. Made worse by their (Last time I checked) website suggesting (Auto filling the contents) very low contents sums insured eg circa £25k for a 3 bed semi

Spikey1

Hi Dacouch....


Just wondering whether CIDRA 2013 would extend to these situations. Its a very new Act so all of its uses & applications are not yet clear.


In essence though, the Insurer would not be allowed to void the cover if the underinsurance was not deliberate or reckless.


I've never had any dealings with Sheila's Wheels but their approach to underinsurance appears to be just the type of thing which the Act is designed to protect the consumer against.


I've used CIDRA already since it came into effect in April 2013 but usually in situations where a 'material fact' has not been disclosed as opposed to an issue involving the adequacy of the sum insured (which is usually catered for by the policy terms & conditions of course).


Any thoughts ?
Cheers

dacouch

Spikey1 wrote: »

Hi Dacouch....


Just wondering whether CIDRA 2013 would extend to these situations. Its a very new Act so all of its uses & applications are not yet clear.


In essence though, the Insurer would not be allowed to void the cover if the underinsurance was not deliberate or reckless.


I've never had any dealings with Sheila's Wheels but their approach to underinsurance appears to be just the type of thing which the Act is designed to protect the consumer against.


I've used CIDRA already since it came into effect in April 2013 but usually in situations where a 'material fact' has not been disclosed as opposed to an issue involving the adequacy of the sum insured (which is usually catered for by the policy terms & conditions of course).


Any thoughts ?
Cheers

Quite likely although I don't think they should have done it before CIDRA.

Here are just a handful of the many cases

https://forums.moneysavingexpert.com/discussion/comment/42095186#Comment_42095186

https://forums.moneysavingexpert.com/discussion/comment/38293206#Comment_38293206

https://forums.moneysavingexpert.com/discussion/3409823

http://www.consumeractiongroup.co.uk/forum/showthread.php?287324-Sheila-s-Wheels-Cancelled-my-house-insurance-any-help-please

It should be noted that coincidently one of the first things their loss adjusters do when receiving claims is to calculate if the customer is under insured

weejonnie

Under the insurance disclosure act (2012) which came into effect last April insurers are specifically empowered to void policies for deliberate or reckless misrepresentation of facts and to reduce payouts for innocent misrepresentation.

Insurers would have to prove that the proposer had deliberately or recklessly underdeclared their sums to be insured before they could void the policy.

I therefore feel that Tesco could not void the policy for underinsurance unless it was really bad.

TSx

Just as a practical example, I dealt with the outcome of an FOS complaint last year which was very similar (although prior to Consumer Insurance Act - although it indicates how the FOS view such situations).

Policyholder took out a policy with a certain level of cover (a blanket sum, so £40k or so, with an inner limit of around £15k for valuables) and had a break in shortly afterwards. The claimed amount was about £120k, of which £80k was jewellery which had been valued recently and which they had a valuation for.

In our underwriters eyes, it was deliberate mis-representation - they policyholder was clearly aware of the value of their contents exceeding the sum insured significantly but chose to underinsure - and the risk wouldn't have been one we would have taken on if we'd have known the correct facts. They voided the policy.

Despite that, the ombudsman upheld the consumers complaint on the basis they hadn't been made completely aware of the possible consequences of under insuring (something it seems Tesco have tried, albeit badly, to do here).

On another note, as has already been pointed out, the reason they do not just pay up to the limit is because you effectively are self-insuring whatever amount you do not insure yourself. If you have £80k of contents and declare £75k, it is not for you to pick which £5k you have decided to self insure - therefore the loss is split between you and the insurance company proportionally.

In practice however - I don't know if it's standard industry working, but we have a tolerance of around 80% - if the contents is adequately insured by at least 80% then we don't take any action in respect of underinsurance (other than limiting to sum insured). In your example, if you had more than £64k of cover (with an £80k value at risk), we wouldn't apply any underinsurance to a settlement.