Block Policy Buildings Insurance Claim reveals Mis-sold policy?

CRV_2

HI,
We recently made a claim on our buildings insurance which is on a block policy basis with our neighbour (ground floor/1st floor maisonette).
We were advised by our insurer (The AA) that even though they underwrote the policy, they assigned Lloyds Bank as the Claims department - We started the policy in Sept 2019 and made a claim 6 months later for works to be completed on our driveway for a water leak - lloyds Bank do not cover claims for Block policies. The AA cancelled our policy with immediate effect and started a new policy for us as a single property policy and our neighbours had to start a new policy with another provider. We paid for 6 months premium plus a further month and a halfs worth of premiums after they cancelled the policy. Does this mean we have been mis-sold an insurance policy as we have paid for it but the company then cancel the policy (without refund) due to the claims department not being legible for any claims. Imagine if we had not made a claim, we would still be paying a premium for a policy not worth anything to any claim now or in the future. Has anyone else experienced this?
Thanks

Weighty1

So they paid out on the claim? If so then they've made good their error and you can't really argue over that - the policy has done what it was intended to do.

bigisi

CRV wrote: »

HI,
We recently made a claim on our buildings insurance which is on a block policy basis with our neighbour (ground floor/1st floor maisonette).
We were advised by our insurer (The AA) that even though they underwrote the policy, they assigned Lloyds Bank as the Claims department - We started the policy in Sept 2019 and made a claim 6 months later for works to be completed on our driveway for a water leak - lloyds Bank do not cover claims for Block policies. The AA cancelled our policy with immediate effect and started a new policy for us as a single property policy and our neighbours had to start a new policy with another provider. We paid for 6 months premium plus a further month and a halfs worth of premiums after they cancelled the policy. Does this mean we have been mis-sold an insurance policy as we have paid for it but the company then cancel the policy (without refund) due to the claims department not being legible for any claims. Imagine if we had not made a claim, we would still be paying a premium for a policy not worth anything to any claim now or in the future. Has anyone else experienced this?
Thanks

How much compo are you after?

SonOf

Does this mean we have been mis-sold an insurance policy as we have paid for it but the company then cancel the policy (without refund) due to the claims department not being legible for any claims.

Either missold or missbought.

However, if the insurer paid out on claim then they have acted fairly and there is no compensation due to you (assuming that is what you are after).

davidwatts

This is quite common with Insurance bought from "panel insurers" like the AA and Saga, who do not actually provide insurance themselves. They provide a service by selling you insurance that is underwritten by someone else.

Sometimes a risk gets placed incorrectly with an insurer because it is outside of their acceptance criteria. This often comes to light when a claim arises. If the incorrect acceptance is down to inaccurate information provided by the customer then we are in the usual situation of the claim potentially being turned down.

If, however, the error lies with the AA or the Insurer, the claim will be dealt with and then the insurance will be transferred to another panel insurer who has different acceptance criteria. If the fault lies entirely with the AA they may have to compensate the original insurer for the claim they have had to pay out.

As long as the claim is settled and the risk is then placed with an appropriate insurer there is no real detriment for the customer.

The bigger issue here, for me, is whether you now have the property insured on the correct basis, i.e. with two different insurers. If this property really should be insured on a single block policy then you should go elsewhere and find an insurer (or broker) who can provide such cover. You may be storing up problems for the future by having the building insured with two different insurers.