Insurance claim after a burglary - Is this the norm? 21 February at 11:30PM in Insurance & life assurance 3 replies 141 views

tsukiduki

Hi, I wonder whether anyone could help me with this please?  Unfortunately I was burgled in November last year.  Sadly, despite not having very many valuables, what I did have the unwelcome visitors found and helped themselves to.  I have contents insurance but this is where I am a little lost as I've never had to have a claim before.  I have a new for old policy.  The items that were taken were old and had more of a sentimental value to me (despite their monetary value) and so they are not items that I would go out and want to deliberately replace e.g. my grandfather's watch and cufflinks.  Anyway, I've received an offer today from my insurance company's jeweler; they have given me a break down (I had to request this as they were being very pushy on the phone trying to get me to settle today).  It is only now that I have discovered that the value of my 10 items (the values of which I am in agreement with) will only be given to me if I choose to accept their vouchers and therefore replace the items otherwise they will give me a reduced cash sum which equates to about 80% of my overall claim.  They have stated in an email that 'a cash settlement would not reflect the value of all your items'
My question therefore is, does this sound right?  I feel that if I have a new for old policy then it really shouldn't matter how I choose to make the settlement - it shouldn't be reduced if I choose to take the cash!  However, as I say, I am very green when it comes to making insurance claims and so thought I'd ask here for any advice.
All advice gratefully received and I thank you in advance.

Aretnap

Yes, it's the norm. The new for old part is designed to ensure that you are able to replace the items with equivalent new ones - and giving you vouchers does that. (Assuming the supplier they're giving you vouchers for is able to supply an equivalent replacement, of course).

Insurers are in a position to negotiate discounts with their suppliers, so it's likely that they are getting the vouchers at a discount - 80% of face value doesn't sound improbable. This reduces the insurers costs and helps keep premiums down for everyone. The Financial Ombudsman considered it fair that if the customer asks for a cash settlement instead, the insurer can reduce the amount to reflect the discount they would have got from a preferred supplier.

You might not feel that a new watch and cufflinks would reflect the sentimental value of your grandfather's stuff - but neither would cash either. You can't put a price on sentiment, and unfortunately insurance companies can't put a price on it either.

DullGreyGuy

tsukiduki said:

Hi, I wonder whether anyone could help me with this please?  Unfortunately I was burgled in November last year.  Sadly, despite not having very many valuables, what I did have the unwelcome visitors found and helped themselves to.  I have contents insurance but this is where I am a little lost as I've never had to have a claim before.  I have a new for old policy.  The items that were taken were old and had more of a sentimental value to me (despite their monetary value) and so they are not items that I would go out and want to deliberately replace e.g. my grandfather's watch and cufflinks.  Anyway, I've received an offer today from my insurance company's jeweler; they have given me a break down (I had to request this as they were being very pushy on the phone trying to get me to settle today).  It is only now that I have discovered that the value of my 10 items (the values of which I am in agreement with) will only be given to me if I choose to accept their vouchers and therefore replace the items otherwise they will give me a reduced cash sum which equates to about 80% of my overall claim.  They have stated in an email that 'a cash settlement would not reflect the value of all your items'
My question therefore is, does this sound right?  I feel that if I have a new for old policy then it really shouldn't matter how I choose to make the settlement - it shouldn't be reduced if I choose to take the cash!  However, as I say, I am very green when it comes to making insurance claims and so thought I'd ask here for any advice.
All advice gratefully received and I thank you in advance.

You need to read your policybook and the basis for settlement. 

Assuming it is outlined in the policybook then the Financial Ombudsman consider it to be fair that a cash settlement reflects the cost of replacing the item to the insurer not the retail price for items. Because of the volume of items insurers have to buy they are able to negotiate fairly substantial discounts with their preferred suppliers.

It unclear from your post what the offer for vouchers were -v- the cash settlement.

newatc

I've only claimed once when my wife lost her decent watch while on holiday. our insurance limited the cash payment to £250 per item (the watch had cost over 300 and replacement was now 420) but said we could have vouchers worth £400 for the Jeweller in question. I admit I was surprised by their generosity and accepted the vouchers gladly.