Claim back buildings cover from Direct Line?

miss_miggins

I have just seen my elderly mother's ( 80 yrs old) policy documents for home insurance. She has been with Direct Line for many years and was unaware that she has been paying for £1000000 worth of building cover.
Her home is worth only £100K.
She has accepted this as a standard insurance amount without questioning the level of cover.
Direct Line have been aware of the value of her property- so why should they have sold her insurance so much in excess of what she needs?

Does she have a possible claim against them for mis-selling- she has paid out thousands over the years to cover such a huge amount that she could never claim on.

Any advice?

mjm3346

It's simply their automatic cover level.

If you are looking for buildings cover then why not try Direct Line? We automatically provides buildings cover up to £1,000,000 for the cost of rebuilding your home and any outbuildings with our standard home insurance policy

http://www.directline.com/home-insurance/buildings-cover.htm

dunstonh

I have just seen my elderly mother's ( 80 yrs old) policy documents for home insurance. She has been with Direct Line for many years and was unaware that she has been paying for £1000000 worth of building cover.
Her home is worth only £100K.

Automatic cover upto a certain amount is the most common type of policy around today. The method of specifying the sum insured is old fashioned and tends to be used on obsolete policies or properties of non-standard construction or with specific issues.

She has accepted this as a standard insurance amount without questioning the level of cover.

Which she was correct to do.

Direct Line have been aware of the value of her property- so why should they have sold her insurance so much in excess of what she needs?

Because that is the way it works with blanket cover policies.

Does she have a possible claim against them for mis-selling- she has paid out thousands over the years to cover such a huge amount that she could never claim on.

None whatsoever.

miss_miggins

Thanks for that- I though she had been diddled. She still seems to have been paying a hefty premium.

mjm3346

miss_miggins wrote: »

Thanks for that- I though she had been diddled. She still seems to have been paying a hefty premium.

As wrong as it is the hefty premium is her "reward" for remaining a loyal customer, most give better deals to new customers and only offer them to existing ones who contact them about not renewing.

miss_miggins

mjm3346 wrote: »

As wrong as it is the hefty premium is her "reward" for remaining a loyal customer, most give better deals to new customers and only offer them to existing ones who contact them about not renewing.

Exactly, she has allowed them to renew her policy for years without questioning the cost.
Now due for renewal in march so I will help her to shop around.

magpiecottage

miss_miggins wrote: »

I have just seen my elderly mother's ( 80 yrs old) policy documents for home insurance. She has been with Direct Line for many years and was unaware that she has been paying for £1000000 worth of building cover.
Her home is worth only £100K.

As DunstonH says, the point is that they are ensuring there is sufficient cover.

If you choose to go for a specific value it must be the REBUILDING COST, not the market value, which will be different.

If you insure for less than the rebuilding cost then in the event of a claim the insurer will not simply pay the full amount up to the policy maximum. They will work out how much the maximum is as a proportion of the total rebuilding cost and only pay that proportion of the actual claim.

For example, you insure for £100,000 because that is the market value but the rebuilding cost is £250,000.

You then have a claim for £50,000. The insurance company will pay

£50,000 × (£100.000 ÷ £250,000) = £20,000, leaving you a further £30,000 to find from elsewhere.