Home insurance cash settlement

richardb011721

Hi

We are currently navigating our way through a leak at home (since Oct 2021) which has caused a fair amount of damage to our home. 

We have the same flooring throughout the ground floor and all needs to replaced plus (like for like) the kitchen needs to come out, skirting boards etc. The insurance have had their contractors out and we have finally agreed with their offer.

They are now saying we have to accept 50% upfront and upon invoices they will release the remainder of the liability they have set.

We asked for a full and final cash settlement so we can future prof the flooring and offset some of the cost so we can do some of the work ourselves.

We have had five complaints upheld, no flooring (just the bare concrete) or skirting boards around the ground floor since November and they keep changing the goalposts.

Are we entitled to request the cash value their contractors set so we can carry out the work when it suits us?

Thanks

DullGreyGuy

If you want cash in lieu of repairs then they may settle at the net value of their contractors quote (less the excess) with a promise of VAT repayment if you subsequently submit a corresponding invoice.

richardb011721

We don’t want the cash in lieu though. We have asked for a full and final cash amount (minus excess and VAT until we can prove we have paid any).

That way we are free to change the flooring (which was only two years old anyway so not old / poor quality or in need of replacing) and carry out the other minor works needed on their scope of works myself to allow us to spread the total costs of the works how we see fit and also to carry these out when we can coordinate a family of five, with jobs, dogs and everything else.

Just not sure if a final cash settlement should still be being managed by the insurance company when we have made it clear we will use their final amounts and coordinate everything ourselves?

lisyloo

I don't think you are entitled to have cash instead of repairs.
Presumably you have read your policy that states what you are entitled to?
Which company is it?

richardb011721

Hi. Yes, we have read all the policy and it’s very vague. Apparently, as the claim is now classed as being being so big (£15k) they said they don’t pay out a cash settlement. However, they have said in previous emails they will but before they omitted some work from their own contractors (the latex levelling) which was then added back in after another complaint. They will pay us the cash but in instalments and anything not to the value to their scope of works they will reduce the amount they have agreed. We want everything done as per their scope but spent in a different way. We assumed this was allowed?

lisyloo

The reason they want to pay you in installments is to make sure you're getting the work done.
If you're getting the work done and have invoices then what is the issue with getting it paid as you go?
Or are you wanting to do it DIY and keep the profit?

richardb011721

We bought our house 2 1/2 years ago and spent a lot of money doing it up. We put Nearly 150m2 of laminate flooring down throughout most of the downstairs. We had a leak from the cloakroom tap which caused unknown chaos which has meant (as there are no threshold door bars) the whole matching floor needs to be replaced. 

We are now looking at spending more money on a Karndean tile flooring. We have asked for the cash settlement so we can choose our own flooring otherwise it’s like for like. We want to spend more on it and offset the additional by doing some of the more simple work ourselves. There will be no spare cash and will cost us even more than their liability. If they did it we will have to move out for four weeks. If we do it in stages around holidays etc it will be less disruptive for us. We are not in this as a profit making exercise just being able to choose what we want in our home. 

I was under the impression that once the insurance have agreed a cash settlement amount (from their surveys and contractors) they would give us the amount and the risk and liability would be on our shoulders. Their claims department have said claim amounts, plus storage and alternative accommodation costs are paid to customers but we are not being offered this now we have a claims consultant on it as it’s a ‘large’ amount. The work is simple but it’s a large home which is why it seems like a lot of money. It feels like we are being treated differently. The ombudsman has said it’s a strange way of them settling and we’ve seemed legal advice who also said it’s not normal. 

Just wondered if anyone else had experienced settling a cash settlement in a 50% now 50% on completion but the insurance co still stipulating what goes back in. 

Has anyone just agreed a cash settlement and been given the cash to redo their own home on their own terms?

lisyloo

What you are asking for seems reasonable to me.
What is your issue with the 50/50?
Why do you need 100% up front?
Can you put it on a credit card?
Or are you worried they'll take ages to pay?

Sorry - I'm not judging just trying to understand the issue.

I personally don't think you are entitled to dictate the terms of how the insurance process works and don't see an issue with them wanting proof the work they are paying for is actually being done.

As an aside I now buy my legal insurance insurance separately to my home insurance for this very reason.
You can't use their insurance to sue them.

richardb011721

Thanks. They are saying that if we change the floor they will only pay up to the value of the floor they were going to replace. Seems fair. However, they have said the total claim is just over £15k. Again - we’ve agreed with this. This is the bit we’re trying to get our heads around… why can’t I do the more simple bits and not pay a tradesman and offset that daily amount to the new flooring? 

They are saying it has to be like for like but we are also suggesting other work arounds to save them work and us a lot of disruption so again there is ‘extra’ money in the pot to allocate. We will have invoices and receipts for everything but as they have allocated their allowance (with special schedule of rates for their contractors) to each part we are not allowed to know so if we spend £10k on the floor and they’ve allocated £5k we have to pay the difference. But technically there’s still £5k in the claim so unless we use their contractors we are putting ourselves at a financial risk as we have no idea how much has been allocated to each part of the job. The 50% won’t cover the new floor as it’s a different material so won’t be like for like. Even though their suggested alternative accommodation isn’t like for like and not suitable for us but they’ve said that’s all there is so tough. Feels very much in their favour.

I was wondering about the legal cover (thanks for insight) that was my next port of call but does make sense they can’t investigate themselves. I’ve sought independent advice and they said it’s too small a claim for them to take on and are not sure why it’s been so difficult. 

Annemos

Not sure if this is relevant for you. I had a water pipe burst. They Insurance Company wanted to do a new one with a "mole". For various reasons I preferred to have a full trench. 

So the way we settled it is, they paid the Contractors as if the "Mole" had taken place. I paid directly to the Contractors, the extra amount. The contractors then did a full trench. 

Can you do something like that? Find out from the Contractors how much extra it is to buy and lay the Kardean tiles (as opposed to the ones they want to do). And pay the extra direct yourself? 

Just to add.... this was all arranged through the Loss Adjuster. 

lisyloo

It's all down to negotiation (which doesn't seem to be going well).
I think from their point of view, they will not want to pay for things for which you are not covered even if you save money elsewhere.
There's an issue of precedent and possibly policy.
So you can either have what you're covered for done professionally or take a cash settlement and do what you want with it, but this is usually less. This is because they will have deals with contractors and suppliers who give them discounts, so they will make a loss if they give you the undiscounted amount.
This is fairly standard and I don't think you're going to get very far. 
It's a non-professional opinion but I don't think you're entitled to insist on anything you don't have a contract for in the terms and conditions.
If they fail on their contractual duties then of course you can sue them, but unless you're insured that costs money even in small claims.

Separate legal cover is very cheap (circa £15 per annum) but of course you can't now buy it after the event.