Home insurance cash settlement figure way too low


In May I had a burst pipe underneath the concrete floor in my downstairs shower room.

It must have been leaking for some time as it's affected 5 rooms, in the immediate vicinity the water had risen 2-3 feet up the wall.

Drying has been complete since the middle of July. To give an indication of the size of the problem, ceramic floor tiles have been removed in the kitchen, shower room and porch, as well as areas of wall plaster in 4 of the 5 rooms.

I'm now negotiating a cash settlement, as I have doubts about the insurance company completing the work. This is based on the poor service I've received, and extra work caused, during the process so far.

I've had quotes from independant contractors around the £10,000 mark, but the insurance company are offering less than £3,000.

The current issue is the insurance company don't seem to be able to create a correct Scope of Works - there are many many items of work missing. They revisited last week to do a new scope, and we went through each room in detail, alongside my own list, and after working on this for a full week, the insurance company still can't get the scope right.

I expect some discrepency between my quotes and the insurers cash settlement, but not over £7,000.

Can anyone suggest a way forward please ?
I'm considering paying an independent RICS Loss Adjuster to do a Scope of Works, and then raising the issue with the Financial Ombudsman.

Thanks in advance.


  • BlibbleBlibble Forumite
    503 Posts
    Fifth Anniversary 100 Posts Name Dropper Combo Breaker
    Have you seen the SoW proposed by the insurer's contractor? How do you know aspects of it are missing?

    There will always be some discount if you take a cash settlement at the insurer's cost price, and always some mark-up from the retail contractor who has provided your independent estimate, however I agree that £7k short seems quite a leap.

    Why would you have doubts about the insurer performing the work? It'll be the insurer's contractor who performs it, and they will likely be a firm working on behalf of various insurers with at least as much experience as your independent contractor.
  • Re SoW - the loss adjuster re-visited after the drying cert was issued to revise the SoW based on the extra damage that had been caused during the strip out. We went through my own list in detail for each room and the loss adjuster agreed with this, but when the revised SoW arrived it had many items missing, including obvious ones that were on the original SoW. The insurance company had drawn my attention to the obvious missing items and advised me to check the revised SoW in detail.

    The extra damage caused is the reason I have doubts about using the insurers tradesmen.

    I expect some discrepency between my quotes and the insurers cash settlement, but not over £7,000. I'm told the insurance company had previously phoned my contractor and asked if they'd do it for £5,000, but then offered me less than £3,000.

    It appears that :
    - the different companies / depts involved with the claim aren't communicating effectively
    - they're not able to produce a correct SoW

    If I do decide to use the insurers tradesmen, there's still the issue of the incorrect SoW.

    At the moment I can't see any other option than to escalate to the Financial Ombudsman and get my own SoW done. An internet search has thrown up this solution from someone who had simiilar issues with the same company doing the SoW, and amounting to roughly the same amount of cash settlement - and this proved successful. I wonder if this is the normal sequence of events.
  • ZorilloZorillo Forumite
    773 Posts
    Fourth Anniversary 500 Posts Name Dropper
    In the first instance you need to exhaust the insurance company's complaints procedure.
  • Once you and the insurer and loss adjuster all agree on the correct SoW then discuss settlement.
    Until you have agreed on the SoW, there is little point talking financials.

    I don't understand why you don't want to use the insurers tradesmen, I doubt the insurer actually has a team of tradesmen, most likely they will just contract the work out.

    Any cash settlement will be for the price the insurer would pay their own tradesmen, less of course your policy excess.
  • FutureGirlFutureGirl Forumite
    1.2K Posts
    Sixth Anniversary 1,000 Posts Combo Breaker
    Don't forget that if you get a RICS loss adjuster in, they may add stuff on that is not covered under the policy - perhaps that is what your builders have done?
This discussion has been closed.
Latest MSE News and Guides

Gin, gee-gees & groceries

This week's MSE Forum highlights

Team Blog

2for1 adult tickets to theme parks

Via selected £1-£3 Kellogg's promo packs

MSE Deals