taking insurance company to court/claim compensation

k100danny

I wonder if anyone has any experience with taking an insurance company to court or through small claims for compensations. I will give a description below of what has happened and why i think this is our next step, i have contacted a local solicitor who said we have a perfectly valid claim but i should look to seek this back through small claims and probably wouldn't require a solicitor.

My house was flood damaged in 2007 (we didn't realise until 2009 because no actual water came in) but plaster started coming off the walls etc and when we called them they said it was flood damaged and the full downstairs of the house needed to be ripped out, they accepted liability and the work went ahead, they told us this would take 12 weeks.

Initial remedial works took 10 months to complete but we were happy with the finish etc, infact very happy. It looked great, on the surface...

we had been asked to get quotes prior to this work from local approved tradesmen because due to floods builders were still very busy, they turned down out quotes to fix and the loss adjuster appointed an out of town firm to do the work (total cost 18k more than our quotes)

anyway roll on 5 years and we had had the insurance company back 3 times about problems in the kitchen, cabinets starting to bow etc but they said this was not covered and i would have to pay for this myself, i believed it was faulty workmanship and sought out a second opinion but again they said not covered, i accepted that and left it.

3 months later the floors in the house started to collapse, we got a specialist out who did a survey and found over 30 faults with the remedial works that have directly caused the dry rot, they were covered air bricks so no ventilations, not clearing out the sub floor, using non treated timber, dumping the old ripped out floor under the new one plus many many more. Insurance sent a specialit who aggred and they in turn acccepted full liability for the house but the loss adjuster refused to look at the kitchen and drew up a schedule of works (14 weeks, total cost 58k) i expressed my dissatisfaction to the insurance company about the kitchen and they said to get an independant survey done which i did, that came back again with faults to the remedial works which were not carried out properly. loss adjuster came and then accepted liability but a new schedule of works had to be completed before works could start, delay of 6 weeks.

We were told by the insurance company that the damage was so severe we would not be able to have suspended timber floors in our lovely victorian property and they were going to fill it with concrete, if we decided against this and it happened again they would not repair it (really not happy) They said we will look to compensate you for the distubrance and the trouble caused (over 2 weeks of work dealing with this) the fact the property can't be put back to original now after their shoddy work, stress (they cancelled my home policy due to the claim but the financial ombudsman told them they couldn't do that and gave me a new policy, as they have put this through as a separate claim i know have 2015 flood claim on my insurance file plus we will have to inform any potential buyer in the future that the property has had severe dry rot hence the now awful concrete floor.

The insurance company could not believe how long this had been dragged out and appologised a lot, They said don't worry we will make sure you are compensated but we ca't until work starts then we know roughly how long you have been out of your house or will be and exactly what it has caused, i thought that was good of them and relaxed slightly. They called today with their final offer of compensations for the measly sum of £475, this is apparently 250 living in rented accomodations, losing someone money for time off work, damaging their property so it can no longer be original is worth to this insurance company.

Needless to say they got told where to stick that, they said the ombudsman would offer about the same which may be the case, I contacted them today and they said that figure definitely needs reviewing and they will be taking the case but said they are not there to punish the insurance company so they only offer reasonable compensations (i estimate £1000 or less) but that i have the option to sue for breach of contract, stress, loss of earnings, damage to the property etc through the courts which i plan on doing. The solicitor I spoke to laughed and said oh dear when i told him what i had been offered and said i should look to seek damaged up to around 5k, the reason for this he said was that anything more would not be a small claims case, costs could go up and may not be recoverable.

Does anyone have experience of taking an insurance company to court or dealing with them for compensations? If so any advice would be welcomed. Thanks in advance

InsideInsurance

k100danny wrote: »

I wonder if anyone has any experience with taking an insurance company to court or through small claims for compensations. I will give a description below of what has happened and why i think this is our next step, i have contacted a local solicitor who said we have a perfectly valid claim but i should look to seek this back through small claims and probably wouldn't require a solicitor.

Small claims is the courts, its just a highly simplified version of it.

k100danny wrote: »

The solicitor I spoke to laughed and said oh dear when i told him what i had been offered and said i should look to seek damaged up to around 5k, the reason for this he said was that anything more would not be a small claims case, costs could go up and may not be recoverable.

The Small Track limit is £10,000 not £5,000, if this solicitor got that basic fact I would be concerned about their rest of their advice.

Costs go up but the issue is that they DO become recoverable, so if you were to win then its fine, solicitors fees can be recovered from the other side. The issue is if you lose that you end up having to pay them £2,000 (or whatever) in legal fees on top of the rest of your losses.

The other issue is that which track of the court things go into is broadly defined by the value of the claim but also by the complexity of the claim. If several expert witnesses are going to be required etc then even a low value claim can end up in the higher tracks of the court.


Why are you considering the courts rather than the Ombudsman? The ombudsman is a no risk option for you where as the courts can end up costing you money. If you have already been through the ombudsman and they didnt uphold the complaint then the chances dont look that great for the court either.

UK legal system works on the basis of indemnity, ie it looks at the financial changes an incident has caused and puts you back in the same position. The ombudsman however will consider soft elements like "inconvenience" and give discretionary awards for that in addition to the actual losses.

It would be interesting to see a breakdown of what your heads of claim are and the value against each and what the solicitor advised you adjust the numbers to.

k100danny

Hi, we have been to the ombudsman who are looking at this but to use the words of the ombudman we are not here to punish insurance companies so they usually award little compensation. To get compensation for damages to the property, loss of earnings etc i was advised that this should be done through a court as it is unlike that the ombudsman would be able to or would be like to offer a figure of more than £1000 in compensations but that both cab be done, ombudsman and using our own solicitor or through CAB. i have had weeks off work dealing with this, the insurance have appologised, sacked one loss adjuster and admitted all liability aswell as stating they are unsure how the original builder got the job. They had only been a registered business for 3 months and were already doing insurance work for this loss adjuster who shouldn't have awarded a contract at that much over our quote as his job is to adjust the loss.

there is also the case that the house is now no longer as it was, we may have trouble selling due to us having to tell people about the damage, and my insurance file now has a claim on because it went through as a new claim. which will make the property hard to insure for anyone buying it as it states flood damage claim 2015.

I don't have a break down of what he has told me to claim for this was a ball park figure and sorry yes he said 10k not 5k this was my thinking of small claims (it used to be 5 if i remember rightly) but he said taking into account the time i will be out of my property 8-9 months, the time taken off work and the fact we will now have a concrete floor alone justify taking this matter further to seek compensation a lot higher than they are offering.

aym280

k100danny wrote: »

Hi, we have been to the ombudsman who are looking at this but to use the words of the ombudman we are not here to punish insurance companies so they usually award little compensation. ...

My blood boiled when I heard those words. If rogue companies are not SEVERELY punished, that is there to stop them from doing it again?? Nothing! This is a great place for people to air their grievances and seek advice! Respect to MoneySavingExpert!:money:

InsideInsurance

k100danny wrote: »

Hi, we have been to the ombudsman who are looking at this but to use the words of the ombudman we are not here to punish insurance companies so they usually award little compensation.

The civil courts dont punish anyone either, they provide successful claimants with indemnity not punitive damages

The ombudsman can instruct insurers to pay up to £150,000 in damages plus interest and so your complaint is well within their limits.

You need to separate out your actual financial losses from the "inconvenience" type elements. The former is simple, if you can provide suitable evidence of it then its pretty much a no brainer. Inconvenience is where its more challenging and the courts are unlikely to make large awards. You can see the FOS' own guidance on what they give on http://www.financial-ombudsman.org.uk/publications/technical_notes/distress-and-inconvenience.htm

aym280 wrote:

My blood boiled when I heard those words.

Then it would be good for you if you learned the different roles that the PRA, FCA and FOS play within financial services

k100danny

thank you for your replies.

I can certainly prove the time taken away from work to an extent, they at first were not accepting liability so i had around 4-5 appointments with specialists and surveyors for the to do reports, each of these were a couple of hours long, the insurance will have a record of over 100 phone calls some lasting up to an hour to try and resolve certain issues, we have also had to take time out to do things that are the loss adjusters job, once the insurance found out about this the loss adjuster was taken from the case and a manager at the firm appointed, to use their words it's your furniture you have to sort out the storage, this was one of many of him not wanting to do any work.

i can roughly calculate the time taken away and divide this by my salary, i would estimate at least 2 weeks taken out of my working week over the last 5 months, annual salary 50k so pretty easy to work out.

i would also expect significant damages for the floor which will now be solid stone in a solid walled victorian house and this often causes problems, feels awful underfoot and they have had to design a membrane into the wall because in old houses this often force damp upward and into your neighbours property so really it's a band aid not a fix.

thirdly the damages for being out of my home for 9 months, they state i am being compensated with another place to live, to me this is not compensations, i am in exactly the same position as before but with the inconvenience of having to live elsewhere.

what they have offered amounts to about £1.70 per day (estimate) not taking into account any of these things, sorry but i my eyes this isn't enough, it roughly 2 days salary.

InsideInsurance

To plays devil advocate, if I were defending such a claim I would be looking for payslips showing you actually lost pay. If you are using a lunch hour to make a call to an insurer and so you only lost personal time not actual pay then you dont take your salary and back calculate from it.

Even if you did take 2 hours off work I similarly would be looking at if it was necessary for you to do so or if our helpline is open 8-8 mon-sat and you work mon-fri 9-5 why are you taking time off work rather than calling in your own time?

In all legal action you have a duty to mitigate your losses and so if things can be dealt with without losing working time etc then they should be.

I am not your insurer, and even if my current client happened to be your insurer (cant remember you mentioning who they are) I dont work in claims or complaints anymore. I dont want an indepth debate but thought it useful to share the sort of thinking you are going to come up against if you pursue this route.

Personally, I would have looked to the FOS as the risk free mechanism.

k100danny

Those things aswell as my dividend certificates (how most of my salary is paid) can be supplied as they wish, i always pay myself the same money each year.

The time taken off work has been things that cannot be done out of hours, meeting with contractors, loss adjusters etc which are done when they schedule appointments and could not be done over the phone. These appointments had to be made as a direct result of the contractors they supplied. had these appointments been schedules outside of work hours i would still look to be compensated for this as it is taking time from my downtime to arrange things due to a matter that the insurance company have admitted liability for and we are trying to assist in their own court case to reclaim their costs from the builders and loss adjusters.

The ombudsman will be dealing with this matter first off, we have 6 years to take this matter to court for breach of contract. (property will be restored to pre insured event standard) this was not done it was actually in a much worst state but all hidden under the floor along with the rest of the old floor that was contaminated and should have been removed.

I do appreciate your imput with working in the field it is always good to hear another side but we do feel this is a no lose case as does our solicitor who is confident it wouldn't even get to court and would be settled way before that would happen

InsideInsurance

Obviously take the advice of your solicitor over that of a random person on a forum.

The fact you havent loss salary but your company has lost revenue and thus profit and thus has given you less dividends makes things more problematic.

Cannot remember an identical case that I dealt with but the common one we had was employers trying to claim the sick pay they have had to pay someone who we were liable for injuring but they failed as the company was too remote to the accident.

Obviously drawing dividends rather than salary is very tax efficient it does have some disadvantages when it comes to these sorts of things. One of the more recently experienced members who have dealt with claims from contractors with their own PSC may come along and give more direct experience on loss of dividends

magpiecottage

InsideInsurance wrote: »

Obviously take the advice of your solicitor over that of a random person on a forum.

With caution if he does not know the small claims limit!

The fact you havent loss salary but your company has lost revenue and thus profit and thus has given you less dividends makes things more problematic.

It is also worth bearing in mind that going to court can be time consuming too - so you could simply throw good money after bad.

In addition, if the court awarded no more than was already offered - or than FOS awarded - costs could then be awarded against you, even if you won your case.

wially

It sounds like a typical situation with insurers suppliers.

It also sounds like it was not dried correctly in the first place which would have led to the bowing etc. Who did the drying work for the Insurer?

Generally the INsurer and FOS will not pay you lost earnings as these are non insured expenses that each individual incurs during a claim.