Accepting partial legal settlement alongside insurance payout

karenakarena

I have just bought a flat and the bath was damaged when I moved in. I notified the sellers immediately and the sellers offered to pay a settlement of £450. The full cost to replace the bath and fix related water damage is £1200.

I can claim the rest of the building insurance as it is communal so the insurers don't mind that the damage was done before I moved in.

However, the insurers say they will have to deduct both the excess (£500) and the sellers settlement money (£450), leaving me with a £350 insurance pay out. 

I can't see why I can't use the £450 to pay for the excess, so I would have a £700 insurance payout. 

I asked the insurance company this, and they initially said this was a stipulation in my policy. When I asked them to direct me to the part of the policy that said this, they then said it was an FCA regulation and not in my policy. 

Does anyone know if this is true? 

karenakarena

Apologies, that should be a £250 payout not £350.