Mis Sold Home & Contents Insurance? Help please

Carpi09

Good afternoon all,

I have recently looked at my grand parents finances and noticed they were paying £56.53 per month for H&C insurance. They have been paying this for the past 5 years with Lloyds bank. My nan suffers with dementia, and my grandad dealing with a lot of stress because of this so aren't thinking right at all. Basically, they were putting all the trust into the advisor in the bank.

I have stepped in and cancelled this, while on the phone I have established that they were paying for the most expensive cover (unlimited property value etc). There property value is only 240,000 and the standard cover they provide covers properties up to £400,000 and works out at £12 per month.

The financial advisor told them that they need this cover because it is the best for them. Now this to me is misleading and they have been wrongly advised, I explained this to the H&C renewal person who completely agreed with me that they were paying an obscure amount given the property value.

I explained this to Lloyds this morning, but they are disagreeing with everything I am saying.

Is this a case to take further to the financial Ombudsman?

Also, they were sold the Premier Account at £25 per month because it covers home emergency, my grand parents told him they have this with British Gas but he still pressured them in to getting it.

Would appreciate any advice please.

[Deleted User]

I'm not sure why you think the insurance was mis-sold? The insurance pays out to a maximum value of £400,000, but that doesn't mean that it was unsuitable for a property worth £240,000.

Certainly, there are less expensive policies available but this not a reason for complaint (or refund).

I can't say I'm surprised by the Bank's response.

You've already cancelled the insurance (presumably because it's too expensive), all you can do now is find some cheaper insurance elsewhere.

Carpi09 wrote:

Is this a case to take further to the financial Ombudsman?

You cannot complain insurance was mis-sold simply because cheaper insurance is available elsewhere.

Carpi09

Moneyineptitude wrote: »

I'm not sure why you think the insurance was mis-sold? The insurance pays out to a maximum value of £400,000, but that doesn't mean that it was unsuitable for a property worth £240,000.

Certainly, there are less expensive policies available but this not a reason for complaint (or refund).

I can't say I'm surprised by the Bank's response.

You've already cancelled the insurance (presumably because it's too expensive), all you can do now is find some cheaper insurance elsewhere.


You cannot complain insurance was mis-sold simply because cheaper insurance is available elsewhere.

No, the 400,000 is a maximum covered on the new policy I have taken out with them. This is because the property is only worth 240k. This is what they should have been advised in the first place.

The policy they were advised to take out in 2008 was the top, most expensive unlimited policy which they did not need in the first place. They do not live in a mansion... :T

I used my words very carefully, I also put wrongly advised in to. Not just mis sold.

[Deleted User]

Carpi09 wrote: »

The policy they were advised to take out in 2008 was the top, most expensive unlimited policy which they did not need in the first place. They do not live in a mansion...

You cannot complain simply because the insurance was expensive. If, however, the policy was somehow rendered invalid and would not have paid out for some reason already known to the bank at the time of the sale then you might have a case.

Are you sure this was an "advised" case? Was this sold by an actual financial adviser at the Bank and a full "demands and needs" document produced? If not, it's really difficult to complain about being "wrongly advised" if the Bank staff member was simply a salesman.

kingstreet

The property value and the rebuild cost are not related.

The rebuild cost for a property worth £240,000 could be higher, or lower depending on the type of property, its age and construction method.

Having an unlimited sum insured will mean the premiums are based on the postcode and the number of bedrooms in the property. This does not mean the cover will automatically be more expensive than cover where you have accurately worked out the rebuild cost.

Quality of cover can influence price. If they wanted cover for matching sets, trace and access cover, cover for items away from home all could have seen higher premiums charged, or a better quality plan recommended and chosen.

Carpi09

Moneyineptitude wrote: »

You cannot complain simply because the insurance was expensive. If, however, the policy was somehow rendered invalid and would not have paid out for some reason already known to the bank at the time of the sale then you might have a case.

Are you sure this was an "advised" case? Was this sold by an actual financial adviser at the Bank and a full "demands and needs" document produced? If not, it's really difficult to complain about being "wrongly advised" if the Bank staff member was simply a salesman.

He is a financial advisor for Lloyds, he made persistent calls to them telling them they need to come in and discuss their finances. I'm not sure if a document was produced?

He went through all their finances including an inheritance with them and advised what products would be best for them.

roonaldo

A lot of policies including mine are unlimited cover, it just means they will cover the rebuild value whatever it is. It does NOT mean it is providing millions of pounds of unessessary cover, so dont worry about that. Unlimited cover is good.

Rebuild cost and property value are two different things. Also a £56 and £12 policy are not going to be like for like.

I dont know what the bank have done wrong and FOS wont change anything if there is no failings. I think you are misunderstood about this.

[Deleted User]

Carpi09 wrote: »

He is a financial advisor for Lloyds, he made persistent calls to them telling them they need to come in and discuss their finances. I'm not sure if a document was produced?

He went through all their finances including an inheritance with them and advised what products would be best for them.

As already repeated several times now, there can be no complaint simply because the insurance was expensive. Bank insurance policies are by far the most costly and a tied Insurance Advisor for Lloyds will invariably sell Lloyds financial products. The advisor was under no obligation to "advise" the cheapest policy available. The fact that he made "repeated calls" inviting them to discuss their finances is irrelevant. Your grandparents were not forced to attend.

If your grandparents required advice about the best policy at the best price, they should have gone to an INDEPENDENT financial advisor. An IFA would produce a full "demands and needs" document and look for policies hopefully in keeping with the circumstances of the customer.

The Bank have rejected your complaint because it is not valid. Going to the Ombudsman is unlikely to see this decision overturned for the reasons I've already outlined.

haras_nosirrah

also has the policy always been £56 against £12? Quite often policies start of cheap to attract new customers and then go up after the first year. You may find that £12 policy doesn't remain £12 forever

Carpi09

Thanks guys, I will advise grandparents.

We will go ahead with action with the ombudsman and should that be rejected, it will stop.

[Deleted User]

Carpi09 wrote: »

We will go ahead with action with the ombudsman

Your referred complaint will fail just as surely as your original complaint to the Bank. Have you read any of the responses? You don't have a valid complaint. The Bank have in no way acted improperly.