Insurance company retrospectively demands 52% increase in premium after claim is submitted

garybusby

For the past few years we have insured our bungalow through i4me insurance brokers. The cover was renewed on 30th August and this year the policy underwriters was changed from Prestige to Axis, as they were cheaper.
At the end of April this year there was a sudden failure of the kitchen cold water tap connector which resulted in a quantity of water falling on the solid oak parquet floor in the open plan kitchen - lounge of our bungalow. We mopped up straight away and put our dehumidifier on straight away. After a week or so it looked as though it had dried out and there was no sign of any damage.
Our home is in a beautiful location overlooking the sea in Pembrokeshire and for the past 5 years we have rented it out as a weekly holiday home during the summer months. So we vacated it at the beginning of May to go off in our motorhome for the next 4 months. Unfortunately in July our cleaner (who handled the changeovers) gave notice to quit, so mid July on we carried out the cleaning, and it was then that we noticed that a portion of the lounge floor had a slight bit of movement. It seemed that the escape of water in April had some effect after all. When we moved back into the house in the 3rd week of September, the "buckle" was very much worse, so 2 days ago I contacted our present insurance company (Axis) and related the situation to them. They later phoned me and said that as the "incident" had occurred before their policy was in place I should contact the previous insurer as they would have been responsible for cover at that time. So, I contacted Prestige and the claim has been registered with them. I am waiting for the loss adjuster to book an appointment to view the property.
This morning I received an email from i4me (the broker) demanding a further £204.41 in addition to the premium of £390.29 (which had been paid in August) because of loss of no claims discount as I had submitted a claim. I was astounded, I knew that our premium would be increased at our next renewal, but retrospectively??
My phone call to i4me was not satisfactory. They stated that as the event occurred in April then it affected the policy renewed at the end of August. I said , so if I had said that the event occurred on 1st September then we wouldn't be having this conversation? She agreed.
Is this legal to demand an increase in premium retrospectively?
Thanks,
Gary 

csgohan4

It is a claim which was not noted at the time of renewal, so it will inevitably increase premiums, how much by is insurer specific, so it is legal because  of above reasons.

It's like declaring an accident after buying car insurance.  

You can't change the past, it is all logged, so you have to move forward with the claim, hopefully they will accept, but such a long time has passed it will be up to them

garybusby

Thanks for your comment. Your analogy with an accident and buying car insurance is not apt, as there was no intention to make a claim up until the time we moved back into the property. 

dunstonh

This morning I received an email from i4me (the broker) demanding a further £204.41 in addition to the premium of £390.29 (which had been paid in August) because of loss of no claims discount as I had submitted a claim. I was astounded, I knew that our premium would be increased at our next renewal, but retrospectively??

It isn't retrospective.     The incident was April.  Your renewal was in August.  However, the renewal was obtained on the provision of incorrect information.    When the correct information is taken into account, the pricing is changed.  Indeed, you are actually lucky they are offering cover at all and not cancelling the policy.

My phone call to i4me was not satisfactory. They stated that as the event occurred in April then it affected the policy renewed at the end of August. I said , so if I had said that the event occurred on 1st September then we wouldn't be having this conversation? She agreed.

Their response is correct and logical.

Is this legal to demand an increase in premium retrospectively?

Yes.  Indeed, there is a possibility that you have been unlawful in your disclosures.   For example, did you disclose the full extent of the incident to the new insurer at the time of purchase? 

You purchased the insurance on the basis of having no claims or incidents previously for x years. You obtained a discount based on you not having any claims or incidents.  However, you had an incident in April and dont qualify for that discount.  So, the insurer has every right to charge you what you should have paid had the policy been set up on the correct basis.

molerat

garybusby said:

Thanks for your comment. Your analogy with an accident and buying car insurance is not apt, as there was no intention to make a claim up until the time we moved back into the property. 

But it is the same. Just because there was no intention to make a claim at the time does not mean a notifiable event didn't happen.

mattyprice4004

You might not like it, but they're right - the date of the incident is what matters, and if there's now a claim being progressed you are a higher risk than someone hasn't claimed. 
As the incident happened before your renewal, the company are correct to apply an adjustment and it needs to be paid. 
You claimed, you are now higher risk and as such your premium has been recalculated.