House Insurance - Mistake with Assumptions

Leanne031283

Hi all,

I received an email (below) from our house insurance company yesterday and I was just looking for peoples opinions before I reply to them.

In short, we moved in to our house in March 2016. The insurance was arranged prior to us moving in. We had checked that the house or area had not flooded previously (via online flood maps).

We were broken in to over Christmas and the place was turned over but nothing much taken. We claimed for the cost of the back door and a small amount of cash only.

In January the insurers contacted us to say that they wouldn't be able to offer a renewal due to the age of the house (over 100yrs). They paid the claim almost 2 weeks ago and then yesterday we received the below email.

It wasn't until yesterday that we were aware that we had made a mistake on the assumptions and that we are in fact within 100m of a river. Even when we received the email we had to look on Google Earth to confirm this (we are approximately 60m away but I am no good with distances).

We are not trying to make excuses, at the end of the day we answered a question incorrectly, but this was completely unintentional. We don't even remember being asked the question and have no reason to have been deceitful.

We would just like to know if anyone else has ever had a similar situation and what happened.

Thanks in advance.

________________________________________

I’m writing to you in relation to the above home insurance policy. I hope you're both keeping well.

Our underwriters are currently reviewing your policy, and it has come to their attention your property is within 100 metres of a body of water.

When the policy was set up over the phone, we asked for you to answer “True” or “False” to several different qualifying assumptions. In order for you to take out insurance with us, you must answer True to all of the assumptions. If you were to answer False, then we wouldn’t be in a position to offer you an insurance policy.

One of the qualifying assumptions you answered True to was the following;

The buildings have never suffered damage through flood nor is there a history of such damage in the area and are not within 100 metres of any lake, river, stream, canal, sea, or any other body of water.

I’ve attached a copy of your Welcome Pack to this email which highlights these qualifying assumptions, along with some important information regarding your duty of disclosure;

Failure to disclose all material information (i.e. information likely to influence the assessment and acceptance of your Proposal) or providing false information could result in one or more of the following actions:

a) your policy being cancelled;
b) your policy being treated as null and void;
c) a claim not being paid;
d) claims paid being recovered from you;
e) you become liable for additional premiums which the insurer reserves the rights to collect;
f) Terms and Conditions of the policy being amended.

In order to continue with the review of your policy, our underwriters have requested a written declaration explaining why you answered True to the above assumption. We would appreciate a response by 06/02/2017.

Quentin

It depends on the view taken on why the false answer was given.

(If the view is that it was a deliberate attempt to reduce the premium, then expect the worst, but conversely if the view is it was a genuine mistake then (assuming that they would have offered cover anyway) expect them to adjust the premium.

Complete their declaration truthfully and take it from their reply

paddyandstumpy

Out of interest who is the insurer?

Regardless of the type of nondisclosure (inadvertent, deliberate, reckless or innocent) if the risk falls outside of the insurers UW criteria they would be within their rights to avoid the contract. The only grey area is where the misrep is innocent nondisclosure, this could fall either way depending on the strength of your reasoning.

Personally, I would cancel your insurance NOW and look for a new policy with immediate effect.

The reason I've suggested this is if you cancel its not declarable, if the insurer cancels you'll be stuck declaring a cancelled policy for the foreseeable, and the river will become the least of your problems.

ThinkingOutLoud_2

Leanne031283 wrote: »

In order to continue with the review of your policy, our underwriters have requested a written declaration explaining why you answered True to the above assumption. We would appreciate a response by 06/02/2017.

Paddy's approach has a lot of merit!

OR

Ok, so as you have realised, making a false declaration and more than anything having any policy cancelled by an insurer is something you do not want to happen.

The way I read the above is the insurer is giving you the chance to explain why you did not declare. Your explanation suggests that this was genuinely because you did not realise this "body of water" was there? The tone of the letter suggest they are open to a fair, reasoned explanation, hopefully.

I think you need to carefully and clearly explain that you did not realise this was the case and try to explain why that was so. You obviously accept that the water is there, now you have researched it (worth explaining this).

Perhaps, the ability to measure the exact distance is also tricky - but this doesn't work as it suggests you knew it was there but didn't check the distance. You cannot argue both IMHO.

I wonder if when you bought the house, your survey made any reference to it. If your surveyor made no note, then that would be helpful proof of your position. Of course, this will only be the case if you had a full survey, not just a valuation for the mortgage company.

Hopefully, they will take a reasonable view, if your explanation is plausible and honest.

Leanne031283

Hi,

Thanks for the quick replies.

ThinkingoutLoud - we knew the river was there (it is very noticeable) but we didn't notice this as part of the assumptions. I know it was more than likely mentioned on the call to set up the insurance and that it was printed in the policy documents but this was a complete oversight on our part - never a deliberate act of deception. Honestly, it was whilst we were getting ready to move and we had problems getting insurance due to the age of the house and were concentrating on details relating to that side of things - we just never picked up on it.

Paddy - the insurer is 123.ie (we live in Ireland). I know laws and guidelines are different but I am from the UK originally and have always used MSE.

I presume we can cancel the policy even though we have made a claim? (I know there will probably be an "admin" fee etc).

Quentin

There may be an admin fee. There will be no refund for the unused portion.

They may still want your declaration regarding the assumption.

Make sure you can get cover elsewhere before deciding to cancel as you now have a recent claim to disclose as well as the correct information on the river plus your original issue on the age of the property

Leanne031283

Thanks Quentin,

We already had somewhere else lined up, so we might just get that in place first.

I presume that we don't need to declare anything about cancelling our current insurance, and that we can just amend the policy start date?

Quentin

Yes, if you have alternative cover lined up (who are happy with the issues - age/nearby water/recent claim), then start it now then cancel your current policy straight away. (No need to mention that you are cancelling your existing policy to any other insurer)