Insurance Claim - Settlement Advice?

hyeung

Hi,
I'm trying to assist my elderly mother on an insurance claim due to a break-in over the recent weeks.
This is the first time i've had to deal with a home insurance claim, so looking for some help and guidance on an issue.

One of the items stolen was watch was owned by my dad who passed away early May this year.
The insurance referred the item to a specialist and have given us a proposed settlement value for the watch i.e. ~£1200.
However, the issue i have is that in order to get this value it'll be provided as a voucher that can only be used with their supplier - ernest jones.

Another issue is that the specialist have advised that the specific model of this watch is no longer available for replacement. Hence the value given is just based on an equivalent. The example given is obviously different in style, and due to the circumstances, it wouldn't make sense for my mum to replace it with something different that had some sentential value. If that makes sense?

The specialist advised that if we took a cash settlement it would attract a 40% discount in the proposed settlement value, so about ~£700.

My initial thoughts is that this seems unfair under the circumstances; as I feel we are forced to select a different replacement in order to get the assessed value of the stolen watch; or get a cash settlement that is discounted by a very large amount?

Would I be correct to expect that if the insurance is unable to replace the exact same item via their supplier (same model), then it would be reasonable to expect they offer my mum the full assessed value as a cash settlement instead (without discount)?

Appreciate any advice on the above.

Thanks,
hy

user1977

What do the terms of the policy say about it? Pretty commonplace these days for them to offer you replacements (or a voucher to buy one) rather than cash.

DullGreyGuy

You need to read the policybook on the basis of settlement of claims. 

Most insurers do state that settlement will be made via their approved suppliers and as such they are entitled to reduce settlement to represent their corporate discounts if you insist on cash rather than vouchers/gift card. The only exception to this is if their preferred supplier cannot provide an appropriate replacement.

An appropriate replacement doesnt have to be the identical model and there will always be a debate on what exactly "appropriate" is. 

The voucher however will not normally be limited to buying that particular watch, it'll just be £1,200 in Earnest Jones so she could buy something else rather than a watch if she prefers. When my mother lost her and my late father's jewelry/watches in a theft she used the vouchers for totally different items as a similar or even like for like replacement was never going to be the one my father gave her or he had. 

Unfortunately sentimental value cannot be insured

hyeung

DullGreyGuy said:

You need to read the policybook on the basis of settlement of claims. 

Most insurers do state that settlement will be made via their approved suppliers and as such they are entitled to reduce settlement to represent their corporate discounts if you insist on cash rather than vouchers/gift card. The only exception to this is if their preferred supplier cannot provide an appropriate replacement.

An appropriate replacement doesnt have to be the identical model and there will always be a debate on what exactly "appropriate" is. 

The voucher however will not normally be limited to buying that particular watch, it'll just be £1,200 in Earnest Jones so she could buy something else rather than a watch if she prefers. When my mother lost her and my late father's jewelry/watches in a theft she used the vouchers for totally different items as a similar or even like for like replacement was never going to be the one my father gave her or he had. 

Unfortunately sentimental value cannot be insured

I looked at the policy booklet online...in the approrpriate section it states the following:

"How we settle claims
For any item of contents that is lost or damaged we will choose whether to
: > replace or repair the item or part
 > pay the cost of replacing or repairing the item or part, up to the amount it would have cost to replace or repair using our own suppliers, or
> make a cash payment
We won’t pay more than the amount it would have cost us to replace or repair using our own suppliers.
If appropriate parts or replacement items are not available, we will pay the full cost of the item, provided the sum insured is adequate."


I also found the following - www.financial-ombudsman.org.uk/files/2798/10.pdf
Page11 - 
"Opting for ‘replacement’ is only a reasonable option on the insurer’s part if the object claimed for can be replaced. If the object is antique jewellery, for example, then it is not open to the insurer to insist the claimant buys a modern replacement from a chain shop. Similar issues arise whenever the replacement options are limited. It may, for example, be unreasonable to limit a policyholder’s choice of replacement to a particular retailer. Policyholders should be allowed to choose where they purchase a replacement and they are entitled to a cash settlement if they cannot find an acceptable alternative. In such circumstances, we would not regard it as reasonable for the insurer to make a deduction from the cash settlement to represent any discount it would have got if the policyholder had bought a replacement from one of the insurer’s nominated suppliers. Nor would it necessarily be appropriate for the insurer to offer vouchers to the policyholder. If the option of replacement is not available, then the only way in which the insurer can indemnify a claimant is by a cash settlement. In some cases, policyholders may not wish to purchase a replacement for the damaged or stolen goods. This may be, for example, because their circumstances have changed, or the object had sentimental value. Where this is the case, we will normally ask the insurer to agree a cash settlement."


What you've pointed out is exactly what i'm trying to understand if there is any merit in debating further? i.e. definitions of appropriate replacement.
Clearly, they cannot replace identical model; if they could via their suppliers then there would be no debate.
If the equivalent is simply not the same in style and we dont agree to it being an acceptable alternative does this not allow us to get a cash settlement without discount in order to provide more flexibility to select an alternative (rather limiting to 1 supplier)?  

This is partially how i read the ombudsman's view, but would mind other views in their interpretation. 

user1977

How different is the available replacement from the watch which was lost?

hyeung

user1977 said:

How different is the available replacement from the watch which was lost?

The one to the right is the lost and stolen one. The left is what they have proposed as an equivalent. Not the most obvious from photo, but the proposed is a larger sized watch in style (44mm case), whilst the lost one is smaller slimer design (~38-40mm case). 

Incidentally having checked ernest jones (signet voucher supplier), they dont even have the proposed watch on the left? The closest similar one to what they have proposed in design is far more £2400.  

DullGreyGuy

hyeung said:
Incidentally having checked ernest jones (signet voucher supplier), they dont even have the proposed watch on the left? The closest similar one to what they have proposed in design is far more £2400.  

This is the much stronger argument than if the proposed replacement is appropriate or not however I would double check with Earnest Jones as they are a stockist of Maurice Lacroix watches and so its likely they are able to supply any of the current models even if they dont actively list them on their website. 

You could try the argument that the step up from 40mm to 44mm (you should be able to say definitively if the old was 38 or 40) that it isnt an appropriate replacement but its not a particularly strong argument particularly given its not something thats likely to be worn in the short term. 

hyeung

DullGreyGuy said:

hyeung said:
Incidentally having checked ernest jones (signet voucher supplier), they dont even have the proposed watch on the left? The closest similar one to what they have proposed in design is far more £2400.  

This is the much stronger argument than if the proposed replacement is appropriate or not however I would double check with Earnest Jones as they are a stockist of Maurice Lacroix watches and so its likely they are able to supply any of the current models even if they dont actively list them on their website. 

You could try the argument that the step up from 40mm to 44mm (you should be able to say definitively if the old was 38 or 40) that it isnt an appropriate replacement but its not a particularly strong argument particularly given its not something thats likely to be worn in the short term. 

I checked our local Ernest Jones store and they have advised me that the proposed watch is not in stock; even in other Ernest Jones stores. 

Normally if they don't have a watch available in store, but is shown on their website they can arrange to get this in from another store or in-house stock so that you can try it on and see at the local store. 

They have mentioned that its unlikely to be back in their Ernest & Jones stock as it's an older model. 

At this stage we would want to at least see the watch in person to confirm its acceptable. Which i think is a perfect reasonable thing to do? I have also looked at other stores that retail the Maurice brand and unfortunately in Glasgow the Ernest & Jones branch that we visited is the ONLY retailer in Glasgow according to the official Maurice website.

I wonder if based on this, its enough to go back and state we're having trouble getting or seeing the proposed replacement? On that basis request for a full cash settlement giving us the flexibility to look at other alternatives rather than one supplier - Ernest & Jones?

DullGreyGuy

Did they say they will be getting it back in stock in a reasonable timeframe or not?

If not then there is your grounds for complaint... their supplier cannot provide you with the identified appropriate alternative. Therefore it's unfair to discount a cash settlement to obtain the item from another supplier that can. I wouldnt muddy the waters with talking about wanting to see it in person first given any order online can be returned as your statutory right.

hyeung

DullGreyGuy said:

Did they say they will be getting it back in stock in a reasonable timeframe or not?

If not then there is your grounds for complaint... their supplier cannot provide you with the identified appropriate alternative. Therefore it's unfair to discount a cash settlement to obtain the item from another supplier that can. I wouldnt muddy the waters with talking about wanting to see it in person first given any order online can be returned as your statutory right.

They said unlikely to get back in stock now. It's regarded as an older model. Also, it's now no longer available on their web site anymore, so you can't even order it online.  
The way they explained is that they tend to order a large batch of stock (for the company) and once sold, they tend not to re-stock. 
However, they did say that they might be able to put a special order but that would mean 50% non-refundable deposit, so if you see it and it don't suit, you've lost your deposit. I don't think this would be an acceptable route, especially when i know the watch is going to be very different (design/style and size in comparison to our stolen one). Hence the requirement to at least view it and try it before committing.
Just before you ask, i cannot even view the proposed watch from another supplier as none of them are local. It's not going to be reasonable for us to have to travel to another city for instance to view i.e down London

DullGreyGuy

These are points to put to your insurers, though they may decide to leverage their relationship and not make the deposit non-refundable. 

You'd need to check the ombudsman's website about how much weight they give to if you like an item on deeming if its an appropriate replacement. I've come across disputes much more commonly when it comes to electronics where an insured is disputing that a LG TV is an appropriate replacement for a Sony simply on the grounds that they consider Sony to be a more premium brand but the ombudsman has ruled that the LG TV was an appropriate replacement (esp considering Sony OLED TVs use LG panels anyway)