Issue paying home insurance claim excess upfront

JohnP2712_2

Had a problem with a home contents claim. The insurers use LMG to loss adjust and settle.

Daughter had some 3 items of jewellery stolen. Insurers accepted claim and LMG then agreed a settlement with me while she was on holiday with BF's parents and uncontactable. LMG asked for me to pay the £250 excess upfront which I did. I assumed I would get this back from my daughter. LMG are now settling with a £455 GEM card (loaded credit card for jewellery only) plus a £160 cheque for a specialised item that cannot be obtained via the Gem card supplier network.


Now daughter is back she tells me she genuinely cannot afford to pay the £250 up front (she is a student). Ideally we now want the Gem card to be reduced by £250 and that I get my £250 back from LMG as cash.


Actually this sounds reasonable to me now I think about it as why do we have to replace the entire loss and suffer loss of the excess direct from our pocket. Isn't an excess the amount you don't get back not a charge that you have to pay upfront if you don't want. Shouldn't you have the choice whether to fully replace (including paying the excess) or partially replace losing the items to the value of the excess. That's what the policy says (i.e. the policy states you don't pay an excess charge, but you don't get the excess back in settlement)


If this stands (and I understand now my daughter honestly cannot pay £250) then I will end up with a Gem card with £250 left on it that I don't want and £250 out of pocket, not a great result and not a satisfactory resolution.

InsideInsurance

She has a £160 cheque so surely we are really talking about £90?

Ultimately, ask. If you dont like the answer then complain to the insurer. If you dont like their answer then complain to the FOS

Generally there are two ways a claim is traditionally settled, either you get cash in which case the excess is simply deducted or a supplier is instructed to replace the items in which case the excess is payable to the supplier. Gift cards are seen as the later rather than the former. The issue with the former is that an insurer can reduce the settlement to reflect the loss of discount that they receive from their suppliers.

Needless to say insurers want to push as much value as possible through suppliers to get the biggest volume discounts

JohnP2712_2

Thanks. I will take your advice and actually have asked. Just wanted to enquire here and also post for others.


Whilst it doesn't make any difference the £160 is to replace a specific item so we would need that in addition to the £250.


In respect of the discount, whilst that may be true its not relevant to my mind. We are insured to the value less the excess. All I want is recompense per the terms. The terms state an excess not a charge

InsideInsurance

JohnP2712 wrote: »

Whilst it doesn't make any difference the £160 is to replace a specific item so we would need that in addition to the £250.

Your total claim is for £615, it is at your insurers discretion over which part the excess is deducted from just as its their discretion how it is settled.

Whilst I can understand you wanting a larger cash element the £250 has already been dealt with under the gift card. If you want that £250 refunded to you then its highly probable that you will find that the £160 cheque is cancelled and the £455 gift card being replaced by one for £365 so that the net result is still the same

JohnP2712_2

Hi


LG have confirmed that they cannot replace the £160 item under the Gem card scheme so I don't see that as a possibility. In any case I will let you know the outcome


Thanks

InsideInsurance

JohnP2712 wrote: »

LG have confirmed that they cannot replace the £160 item under the Gem card scheme so I don't see that as a possibility. In any case I will let you know the outcome

But as said, the excess is applied to the total claim and its the insurers decision how they break it up when there are multiple methods of settlement being used.

If for example someone tries to steal your car by smashing a window and you have a £100 theft excess and a £60 glass excess. The total excess to be paid is £100 as this is one theft claim but typically the insurer will get the window replaced "immediately" using the normal Autoglass etc and you pay them the standard £60 xs and then when the car goes into the garage for the rest of the repairs you have to pay them £40 as the remainder of your excess.

JohnP2712_2

Quick update


Got a result. Direct Line agreed to cancel the card and I got the money

FutureGirl

You will get a discounted cash settlement. Not the full amount.