Flood claim advice

sghughes42

I wonder if anyone could offer any insights in to a situation we are in at the moment.

We were flooded when Storm Katie hit on Easter Monday. A drain running across the street had been blocked by tree roots and despite the council being informed months earlier nothing was done and the volume of rain proved too much.

Shortly after the event we were approached by a claims handling company and were persuaded to use their services. We are having reservations now as to whether this was a good idea but unfortunately we have little choice - their T&Cs include a penalty such that to withdraw from the agreement would involve a sum of money running in to the tens of thousands at this stage.

To complicate matters, when this happened we were in the process of planning to have an extension built on the house. This is really what seems to have caused the issues we are having as the claims handling company seemed to keep forgetting we'd mentioned this as a concern in the way the claim was to be approached.

In essence, we have a conservatory and attached garage which were to be demolished as part of the extension as well as two exterior doors which were to be removed.

The claims handling company have appointed a builder to do a full restoration without considering the extension so they were expecting to replace the conservatory etc. They have offered the option of not doing this but we still have to spend the money with them. We suggested some upgrades by the prices they are quoting are well above the going rate - for example, nearly £5000 for a full re-wire on a 2 bed bungalow.

After various back and to they have negotiated for us the option of a cash settlement with the insurer which would mean we can choose our own builder to do the restoration and use the money that was allocated to the conservatory for the extension. Unfortunately this involves us paying a 20% + VAT penalty plus a deduction on the claim value which in effect wipes out any saving we could make by using our own builder.

Does anyone have any experience of cash settlements? Are there any pros or cons we need to be aware of? Any reason for or against taking this?

Also, does the penalty seem reasonable? I am told they receive a kick-back from their appointed builders so the penalty is basically to replace this.

Are there any other option we could consider?

Had we known the full implications it would of course have been better to get our own builder to quote from the outset but when you are approached by a company claiming to be working for you and especially after a traumatic event it isn't easy to think objectively...

dacouch

Does the contract between you and the claims company allow them to dictate which building contractor you use?

sghughes42

That is the reason for the 20% + VAT penalty - if we don't use their nominated contractor we have to pay the penalty.

maddogb

There is something not quite right with the ambulance chasing firms, there should be a six month automatic get out clause where it is deemed the consumer was "vulnerable" at the time of signing.
You really need to get a solicitor to look at this contract, see if they can flag anything up under consumer law, many of the contracts are written with little regards to law and do leave loopholes a plenty.
For the sake of a few hundred do not take any further steps until you have done this.

sghughes42

I must admit I was unsure about appointing these people at the time but that was for different reasons. Unfortunately when you are in a situation where the insurance company is giving no support it is easy to be swayed.

My concern here is that we may be too far down the line here. We only have 3 months left on the temporary alternative accommodation and I can't see the insurance company extending this as the delays are of our making, not their. The restoration has also been agreed between the insurance company, loss adjuster and the appointed contractor so again I feel it won't be looked on favourably if we disrupted things further at this stage.

We'll look in to it but I feel we are now pretty stuck between the options. It would also be tricky to get out of the contract with this company as they still haven't finalised the contents claim but as their contractors dealt with all the clearing and disposal we don't have any independent records or proof of the contents list which I would suspect would cause us issues there as well where we to get out of the contract with them.

rs65

sghughes42 wrote: »

They have offered the option of not doing this but we still have to spend the money with them. We suggested some upgrades by the prices they are quoting are well above the going rate - for example, nearly £5000 for a full re-wire on a 2 bed bungalow.

Why not just go for this? Fair enough, its over the odds but you're still getting the work done that you need and getting a full re-wire.

Has to be better than taking a cash settlement and paying their penalty.

Even if there is a loophole, you may have to pay for work they have done to date.

sghughes42

While we are still waiting for confirmation of their prices to do the additional work, it is looking like we can get all the work we want done for the value of the cash settlement after penalty by a local builder, while if we choose their builder we either don't get it all done or have to pay them a few thousand more.

This is the main question really, what do we need to be aware of before accepting the cash settlement? What might come back and bite us?

rs65

A cash settlement is usually a final settlement from insurers so that any subsequent problems discovered are yours. Also any problems with the repairs are yours.

Its difficult to say how it would work in your situation though.