Property Insurance - whose risk is it if remedial works fail? The insured party or the insurer?

fairy2

Please can someone explain the difference, if any, between an insurer paying a contractor directly (the contractor chosen by the insurer) or paying the insured party who then pays a contractor. I do not want to find mysef having to argue with the contractor should the work fail in the future and instead want to go back to the insurer who would put this right again. I have been told this week that "it is not insurers obligation to reinstate and the contractual relationship is between the contractor and the insured party" which sounds like the insurer is not interested if there are any future issues. Does this sound right? It is not how I understood things but I may have misunderstood. And does the mode of payment have any bearing on this position? Thanks very much.

TSx

Essentially if the insurer does the works, it’s done under your contract of insurance with them. The main benefit of this is that you have the protection of a regulated complaints system and the Financial Ombudsman in respect of the work, if it goes wrong the insurer is responsible.

If you receive a cash payment from them, and then use this to have the work carried out, you’ve now got a new contract with the builder. The insurer has discharged its obligations under the contract of insurance by paying you. If anything goes wrong it’s down to you to resolve.

The only potential exceptions are if the insurer pays the contractor directly (although they will argue they’ve not contracted with them, the FOS might view this differently) or if they are the one to introduce the contractor to you (ditto).

The insurer will not usually be obligated to carry out the work and the choice of how it’s carried out is usually down to the insurer