what does prudent uninsured mean?

Mrs_pbradley936

Title says it all really.
For those of you following my insurance saga this is the latest thing that I am supposed to be!

dacouch

In what context?

Who has told you this?

huckster

Mrs_pbradley936 wrote: »

Title says it all really.
For those of you following my insurance saga this is the latest thing that I am supposed to be!

I believe this term has come from the US insurance market. It means that you should act as if you did not have insurance in place.

They are basically saying that you were careless, acting in a way that you were not concerned about a loss occuring, as you had insurance that would cover any loss.

OnanTheBarbarian

prudent

adjective
acting with or showing care and thought for the future.

"no prudent money manager would authorize a loan without first knowing its purpose"
synonyms: wise, well judged, judicious, sagacious, sage, shrewd, advisable, well advised, politic, sensible,

Mrs_pbradley936

dacouch wrote: »

In what context?

Who has told you this?

This is my saga:
https://forums.moneysavingexpert.com/discussion/5039957=


Basically I have a compulsory insurance for buildings which included public liability paid for via my service charges.


To cut along story short Zurich says it is a contents related claim but the contents people say it is a liability claim.


I am in dispute about all of this but meanwhile time is running out for the people bringing the claim. I have asked the FOS for help as well as a solicitor. Solicitor says to proceed as prudent uninsured because dispute with Zurich will not be sorted out in time for claims deadlines.

OnanTheBarbarian

Claims deadlines as in the 3 year limitation period for the tenant bringing the claim/ issuing proceedings?

I don't fully understand your solicitor's advice, but my interpretation is that they mean continue to dispute liability, let the tenant sue you and if judgment is eventually obtained against you, hopefully you will have an insurer you can seek an indemnity from? Duly notifying the two insurers with an interest that you are being sued and will seek said indemnity?

Quentin

Mrs_pbradley936 wrote: »

...... Solicitor says to proceed as prudent uninsured because dispute with Zurich will not be sorted out in time for claims deadlines.

The person to ask to explain this to you is the writer (your solicitor).

huckster

OnanTheBarbarian wrote: »

Claims deadlines as in the 3 year limitation period for the tenant bringing the claim/ issuing proceedings?

I don't fully understand your solicitor's advice, but my interpretation is that they mean continue to dispute liability, let the tenant sue you and if judgment is eventually obtained against you, hopefully you will have an insurer you can seek an indemnity from? Duly notifying the two insurers with an interest that you are being sued and will seek said indemnity?

Yes I think that is correct and it could also be the Solicitors suggestion that the radiator only fell off the wall due to the carelessness of the tenant. Radiators don't just fall off a wall, after 10 years of being installed unless there was a defect in the building or failure of the fixing. I would guess that there were plasterboard walls and the installers used the correct plasterboard fixings.

Question for the OP. Was it ever establised by someone independent, as to why the radiator fell off the wall ? Does the tenant have any evidence ?

InsideInsurance

If you read http://blog.willis.com/2014/02/insurers-consent-to-settlement-the-perils-of-acting-as-a-prudent-uninsured/ it will give you most the background

The issue arises from you having to deal with the claim whilst the indemnity issues of the insurance are still being resolved. At times it may be financially sensible to settle a claim for £X rather than spend £Y on defending it when you factor in the probability of success but insurers have historically subsequently rebuked such claims once indemnity has been established because there is no evidence that the insured was actually liable and the policy only covers actual liability.

So the general advice is to act like a "prudent uninsured", ie act like a sensible/ cautious etc person who has no insurance, whilst dealing with the claim being made against you rather than just settling the claim because you know/ believe/ hope that an insurer will ultimately reimburse you.

As others have said though, if you are paying for professional advice you should be getting it in a way that you understand

Mrs_pbradley936

huckster wrote: »

Yes I think that is correct and it could also be the Solicitors suggestion that the radiator only fell off the wall due to the carelessness of the tenant. Radiators don't just fall off a wall, after 10 years of being installed unless there was a defect in the building or failure of the fixing. I would guess that there were plasterboard walls and the installers used the correct plasterboard fixings.

Question for the OP. Was it ever establised by someone independent, as to why the radiator fell off the wall ? Does the tenant have any evidence ?

No we never had anybody establish that this actually happened. Tenant has no photos or any other evidence.

huckster

Mrs_pbradley936 wrote: »

No we never had anybody establish that this actually happened. Tenant has no photos or any other evidence.

They will find it difficult claiming for liability. If they caused their own injury by knocking the radiator off the wall, then their injury was caused by their own carelessness.

Has this got anywhere near a court yet ? If not, I don't think the tenants Solicitors will bother, unless the tenant is paying them. If it is being done on legal expenses cover or no win no fee, then I doubt it would ever see a court room. Your Solicitors just tells them that they have not establised that you their client has any liability for what has happened and would counter that the tenant has caused them a loss e.g the damage to the radiator, cost of reinstalling it. Your Solicitors could threaten to counter claim for the damage caused by the tenant.

If you were allowed to let the flat under the terms of the lease and the Buildings Insurance covered the flat whilst it was being let, then you should be using the liability insurance under that policy.
Obviously at the moment the freeholder does not want this to be used, as no liability has been establised. There is no reason why you could not contact the Buildings Insurers directly to register the situation with them.

It is the block Buildings Insurance that is relevant, as you were not occupying the property. It can become a bit of a grey area, because block Building Insurances tend to cover all walls, roofs, ceilings i.e the actual structure or things that form part of the structure of the block of flats. They won't normally cover kitchens or bathrooms or central heating boilers/radiators in flats. What some people do is to have Contents Insurance extended to cover all the things in a flat which are not covered by the block Buildings Insurance. You could have taken out landlords Contents Insurance to cover the things in the flat, that were not included in the Buildings Insurance.

A relative of mine lived in a block of flats, where they shared the freehold under a management arrangement. One of the flatowners had a subsidence issue caused by a tree. When the repair to the building was done, there was an argument about a kitchen having to be refitted. The flat owner had not included the kitchen within their Contents Insurance and the Buildings insurance did not cover a kitchen within the flat. In the end the Buildings Insurance paid out and included it as part of the subsidence claim. But there were arguments for awhile about who was paying.