Insurance company ripped me off - any advice please?

solmend

A well-known insurance company (don't want to mention names in case they could use this against me) had my property down as suffering from subsidence. I fought this decision (down to their misinterpretation of a quote from the property valuation)and they eventually agreed that this label wasn't appropriate.

During the 5 years I had this label no other companies would even discuss insurance with me as I had to mention the "subsidence" when I applied.

I went to the financial ombudsman who suggested £250 compensation for their "maladministration"- ridiculous considering that I had been locked into a mortgage with the company - £50 per year. Twice - when caught off guard - employees of the company referred to the fact that I was also on a different policy because of the risk of insuring my property - a risk it turns out didn't even exist.

So, I was being overcharged (for a subsidence affected property rather than a "normal" one) and I was unable to find a policy with another company. As a rough guide, when they finally withdrew their subsidence label (therefore freeing me to look elsewhere) and my year with the company had come to an end the quote I got from Allianz was about a third of the price this company was about to charge me. I called up the company asking them to explain this and a representative who was obligingly honest told me that the reason my renewal was so high was that my property was insured for a rebuild of £1million whereas on the RCIS website it gives the rebuild costs as £150,000.)

At so many stages it feels as if the company has been very economical with the truth and twisted and turned to avoid taking responsibility. I feel they have managed to fool the financial ombudsman who needs definite proof and, it seems, has to accept all information at face value.

If you've got this far - thanks very much! What I would like to know is what steps can I take now? I was told by a solicitor that if I lost a case I would have to pay the companies costs, my barrister's costs and the court costs. I can't afford this and know that many companies would call an individual's bluff because they know ordinary people can't afford to lose so don't proceed.

I was told I could appeal against the first Financial Ombudsman judgement but if the appeal procedure also believes the stories spun by the company as the first adjudicator did then what's the point - and they won't hear an appeal for another 15 months.

I wrote to a couple of financial journalists but got no response. I can see that there are sometimes more interesting stories and this one is also quite lengthy to get into a small column.

So now, I feel very angry that a big company has bullied me into submission. I believe they owe me roughly £3000 in overpayments - the difference between the subsidence and non-subsidence policies according to my calculations) and I also believe they should compensate me for the time spent dealing with this matter and for being locked into a policy which prevented me from looking for cheaper alternatives.

Any suggestions about where to go now? Thanks

Quentin

Was your complaint dealt with formally by the FOS?

If so you may have been mislead over your right to appeal.

Who told you that an appeal was the next step? (If you haven't had an ombudsman's final decision then take that option before deciding on court, as that's free win or lose, and you can still go to court if you are unhappy with the decision)

rs65

How did a valuation mean that the insurers had you down as a subsidence risk?

How did it stop you going elsewhere?

Insuring for a blanket £1m is not uncommon, that alone does not mean you were paying too much.

solmend

There were actually two official FO cases (I believe the second one was just a delaying tactic by the company who insisted a complaint I had about the way they responded to the first case was in fact a second complaint) with the FO adjudicator making a judgement in both cases. I think the company pulled the wool over her eyes but she insisted she could only go on evidence provided by the company. The company constantly twisted and turned and I believe they misled the adjudicator but it's very difficult to prove.The FO adjudicator told me I could appeal and that it would take about 15 months going on the present situation.

solmend

rs65 wrote: »

How did a valuation mean that the insurers had you down as a subsidence risk?

How did it stop you going elsewhere?

Insuring for a blanket £1m is not uncommon, that alone does not mean you were paying too much.

When I was ringing round for insurance I asked this company for a quote as I was getting my mortgage from them. The rep on the phone asked if I'd had a survey. I told them I hadn't and they asked what state was the proper in. I read them the valuation report which included a sentence "The property has suffered from previous movement but there is nothing to suggest this is ongoing."

The rep told me this meant subsidence. I had no knowledge of such things and was a naive first time buyer. Believe it or not I honestly thought that as these people are trained in these things, they know to "translate" this sort of thing. I trusted them.

Over the years I began to doubt but the company told me to prove I didn't have subsidence I would have to pay for a surveyor's report. Eventually I went to a company I'd read about who were prepared to offer competitive quotes on subsidence-affected properties. When i read the same info to their engineer, he said there was no way subsidence could be inferred from this info.

When I wrote to the company with this and then spoke to a manager in the middle of the conversation he simply said "ok you don't have subsidence!". He didn't appear to have talked to anyone - it was almost flippant. This u-turn was then confirmed in writing. Then I told him I would be asking for the difference between the subsidence policy and an ordinary one. He replied that it was my choice to go onto the more expensive policy (therefore proving there were at least two policies - a fact continually denied in later communication). I pushed him further on the existence of an alternative policy - I'd never been offered two at the outset and he blunderingly told me that he'd made a mistake and I wasn't offered the alternative policy because my property had subsidence! QED - there was a cheaper policy but I hadn't been offered it because of my house's "label". However, proving the details of this conversation has been impossible. They simply clammed up and refused to discuss it. I can only prove that they made a u-turn with no data or information being supplied to them. The FO cannot infer anything from this but I think that a judge could.

In my later conversation with another employee - the one where I found my property had been insured for 1 million it appeared that another cheaper policy - which had been alluded to by the manager - existed which insured properties for an amount much nearer the actual rebuild costs.

I live in a small two up two down terrace. £1 million rebuild is very much over the top.

solmend

Sorry - it stopped me going elsewhere because when you apply for insurance you are told you must answer honestly. When they asked if my property suffered from subsidence - one of their opening questions for all companies - I had to say yes. Even if I qualified it with an "I don't believe it to be true" they would tell me they wouldn't let me go any further. The only alternative was to get a survey but we had no money to afford the £1000+ charged for this here in London.

My feeling was why should I have had to fork out to prove I didn't have subsidence? It normally doesn't work that way round!

Quentin

solmend wrote: »

There were actually two official FO cases (I believe the second one was just a delaying tactic by the company who insisted a complaint I had about the way they responded to the first case was in fact a second complaint) with the FO adjudicator making a judgement in both cases. I think the company pulled the wool over her eyes but she insisted she could only go on evidence provided by the company. The company constantly twisted and turned and I believe they misled the adjudicator but it's very difficult to prove.The FO adjudicator told me I could appeal and that it would take about 15 months going on the present situation.

OK. So far an ombudsman hasn't given a ruling.


So got to be worth getting a final ruling from the ombudsman at no cost to you.

solmend

Thanks Quentin. The adjudicator sent two reports, each with "findings" and "conclusions". Are these different to rulings? I have to say after the way the adjudicator was led round the houses by the company because she could not infer anything and only make judgements on concrete evidence (therefore what I told her had been mentioned by the manager to me was inadmissible as it couldn't be proven) I don't have a great deal of faith in what the FO can do for me. This is also because when she agreed that I had been unable to go elsewhere for a policy for 5 years she felt that £250 was reasonable compensation.

InsideInsurance

If you are unhappy with the decision of the adjudicator you have the right to request the case be escalated to an ombudsman who gives a final ruling on the case. After that the FOS process is exhausted and your left with the courts