Cash Settlement for Home Insurance Claim

scunner

Hi

The contractors appointed by my insurance company are now offering a "full cash settelement" for the claim. I'm suspicious due to the dispute I've had with the contratcor around the scope of the work. The contractor is offering a settelement on the basis that it would be difficult to work alongside the other contratcor I would have had in to complete work unconnected with the claim once the insurance work had been completed. As yet, the contractor has not clarified how much they're offering.
What should I watch-out for with this offer please, other than to make sure the amount is sufficient to complete the work satisfactorly?
Grateful for any advice please as I suspect a rip-off!!
Thanks.

Spikey1

Suggest you ask your own contractor to quote for the insured works too. Ask for a detailed room by room, line by line scope of measures, rates and costs. You can then compare it to the one prepared by your Insurers contractor.


I'll forewarn you that, in all of my experiences, it is usually the insurers contractors that are 'on the make'. Their estimates usually take a belts & braces approach as they try to bleed every last drop of cash from the insurer.


A local contractor is usually much smaller in size and has lower overheads...in addition, they don't carry the costs of running the administration of the insurance company's scheme. So a local contractor's quote should be much less than that provided by the insurer's own contractor.


So why do insurers have their own contractors if they are so expensive ? Simple....the market (ie. the large corporates who place huge volumes of business with the insurer) demand it !

scunner

Thanks Spikey.

Just got a quote from the insurance contractor - you were'nt wrong!! Their quote for the main part of the work seems ludicrous!!

I'll challenge it - for all the good it will do probably!

Thanks again

InsideInsurance

scunner wrote: »

What should I watch-out for with this offer please, other than to make sure the amount is sufficient to complete the work satisfactorly?

I dont know what the cause of loss was but the general issue with cash settlements -v- having things fixed is if additional damage is found during the repair process. Generally the cash settlement is full and final so you then have little comeback.

22johnny22

scunner wrote: »

Thanks Spikey.

Just got a quote from the insurance contractor - you were'nt wrong!! Their quote for the main part of the work seems ludicrous!!

I'll challenge it - for all the good it will do probably!

Thanks again

If you don't want to accept a cash settlement either

1. tell the insurance company you would like to reinstate and ask them to instruct their contractors

2. Get a comparable quote from your own contractors and as tell your insurers you would like to use them instead.

3. Accept the cash settlement offered by 'the contractors' not sure they are though in a position to do this unless they are invoicing the insurers for the full amount (that would be fraud).

4. Ask your insurers for a cash settlement somewhere under the costs of reinstatement.

scunner

Thanks Johnny

Your update is very helpful and much appreciated. Point 3 is especially interesting: they have offered cash settlement which I believe is considerably short of what it would take to complete the work by my contratcors - I dont know what they would be invoicing the insurance company. I'm getting quotes from my own contractirs together at the moment which I'm sure will show that the cash settlement being offered is too low.

I've also asked the insurance contractors for a breakdown of how they've arrived at their figure based on their schedule of work and will match this against estimates from my contractors.

Thanks again