Changing Home Insurance Provider whilst a claim is still going through

GWD40

Hi all,

We raised a claim for water damage to our ceiling which has taken several months to go through but is now approved and work is due to start at the beginning of May. We are not happy with the way the claim has been handled and for this and various other reasons would like to shop around and go with a different insurer when our policy is up for renewal.

However this will be later this month, before the works have been completed. Will this cause a problem or as the claim has already been approved will it still be honoured? Don't really want to be stuck with them for another year if possible.

Thanks for any words of wisdom.

DullGreyGuy

For any general insurance like Home or Car the claim will always be dealt with by the insurer at the time of the incident that caused the damage. It doesnt legally matter if you have since moved on or not, they remain on the hook for the claim - there are some who postulate that your level of service may not be so good as they've already lost you but in my claim days our system by default didnt highlight if you'd renewed or lapsed and you had to go looking to find out (which was the exception not the rule).

With home however you may have a problem at the other end, some home insurers arent happy taking on a new customer with an ongoing claim and most arent happy taking on a new customer with any major works happening, insurance related or otherwise. 

So if you can find someone whos happy to take you on mid claim your good to go and the old insurer will still deal with the claim.

youth_leader

I had a terrible experience with my insurer when I lost my flat roof in Storm Arwen of November 2021, and wanted to leave them. My renewal was due in February 2022, but the claim was still ongoing at the end of January,  I had to have drying machines here.

I came onto this board and it was recommended I look at the 'approved' insurers on Which, I chose from the top rated ten.  I approached two of them direct and they couldn't supply me with a quote.  I also tried the recommended comparison sites but my choice of company weren't quoting.  I ended up staying with the current insurer, but left this February and am now with LV. 

Annemos

I tend to agree with youth_leader. My repairs started and the Insurance-provided contractors made such a mess of the repairs, it ended up at the Ombudsman and the claim was extended by two years! 

One Insurance Company is enough to deal with at a time, in my opinion. So I feel it is possibly best to move to another Insurer, only after you are happy with all the repairs. 

(Generally, I believe they all use the same set of Claims Handler Companies. And I suspect there might not be much difference between them, anyway!)

DullGreyGuy

Annemos said:

Generally, I believe they all use the same set of Claims Handler Companies. And I suspect there might not be much difference between them, anyway!

For those that want to outsource their claims operations there are a handful of large companies able to handle the volumes of the larger insurers. 

The choice to outsource or insource does go in cycles though and may be different in different parts of the business. When I did some work for a TPA one of their largest clients served notice on their Home insurance saying they were taking it in house but at the same time were negotiating increasing the amount of Motor they outsourced to them. 

Annemos

In my dream of a Utopia Insurance World, I envisage just one Insurance Policy for everyone. (Consumer would never have to worry about wording and cover variances.)

(I will permit budget, medium and premium levels within that, so the pricing can be flexible.)

And the Claims Handlers will be separate entities perhaps, each with their own speciality expertise. And by that, I mean a professional high level of expertise,  based on full knowledge and training and acting fairly for the consumer. 

CH1 handles only travel claims
CH 2 handles only home claims
CH 3 handles only vehicle claims   

Etc.  

As I say, just a dream! 

DullGreyGuy

Claims handlers will already be more divided than that... Motor will be split by FNOL, Recoveries and Technical claims - the later sometimes will be divided down further (we had 1st Party, 3rd Party, Disputed Liability and Injury as separate departments) or sometimes its just a seniority thing in the team. 

Claims handlers generally fairly apply the policy terms, the issue is people often find they dont like the policy terms at point of claim and feel that discretion should be applied. Take a travel policy that pays £50 compensation per person for each complete 12 hour delay.... Customer that is delayed 11hrs 45mins feel they should be paid because its close enough to 12 hours. If thats payable then what about 11hrs 40 minutes?

Issues come with the fact that the FNOL team often are the only telephone number the customer has and in some firms the technical teams are not seen as call centre agents and so "dont take calls". As such the FNOL person has to answer questions outside of their skill set.

There are some cases of cross product claims handlers but that tends to more be in the liability space as dealing with a third party with a broken arm from a motor accident is no different from one claiming for a broken arm after a trip in your shop. 


Personally I think there is an argument that all compulsory insurance (EL, TPO Motor) should be provided by a governmental fund and/or legislation changes how these things are compensated for. Inevitably there will be the question on the efficiency of a governmental scheme and if the increase in taxes would be more than the premiums charged by insurers for these components.

I wouldnt agree a monopoly for discretionary insurance is best, there are large numbers of people that dont fit neatly into broad bands like budget, average, enhanced and by having different companies you have choice and competitive tension to keep pricing down.  

Annemos

I agree.... the policy wording IS the policy wording and things which are clear should not be disputed at all. The customer needs to read the umpteen-page policy booklet, very thoroughly indeed. But policy wording is sometimes left vague, with few examples given to customers.

(I find this to be particularly the case with certain Travel Insurance. They should perhaps give us a few examples of a dummy traveller going on a trip, where things go wrong at various stages and then tell us what applies and when. Lots of people seem to have the wrong impression of what a travel policy actually covers in general practice.)

Technical teams within an Insurance Company or MGA, not taking calls or not dealing with customers, means they can miss what is actually going on at Consumer level. (Or are actually not interested.) I am not convinced that there is always feedback, from the Front-line folks and also the Claims handlers, back to those Technical Teams when questions have arisen. The customer may have to push really hard to break through to the actual technical decision makers on a policy. 


I am not sure if hyper-financialisation is a word that applies to the Insurance Industry or not. But the more fragmentation there is, the more there is room for service levels dropping and customers being treated unfairly. (Delegated authority chains. Claims companies going after everything they can get their hands on.)

I get the impression that they are having some problems retaining people these days within Insurance and there is also a lot of poaching going on. So, continuity must be a problem. Contractors can also be treated poorly by the Insurance model. 

I have always imagined, that if you create an industry that is founded on ethics and values and you reinforce that idea at the Corporate level, then people will want to work within your company and be proud to work within it (as long as you train and educate them and their pay is not rubbish!). They will also give a great service to the Customers. 

I had a chat with somebody about this recently, who knows about Insurance and she said ..... "I am not sure that idea works these days. That's Capitalism for you". (That is to say... it is all just a big business.)

(And, as you have said in the past, people have also been encouraged to shop around to the n'th degree, to get the cheapest policy.) 

It just makes me feel sad to see what is going on sometimes. I really want to love and respect the Insurance Industry..... and also I want to trust it at all stages within the life of a policy. 

Thanks for listening! 

DullGreyGuy

Annemos said:

I agree.... the policy wording IS the policy wording and things which are clear should not be disputed at all. The customer needs to read the umpteen-page policy booklet, very thoroughly indeed. But policy wording is sometimes left vague, with few examples given to customers.

(I find this to be particularly the case with certain Travel Insurance. They should perhaps give us a few examples of a dummy traveller going on a trip, where things go wrong at various stages and then tell us what applies and when. Lots of people seem to have the wrong impression of what a travel policy actually covers in general practice.)

Its certainly true that some things will fall between the cracks because there are so many things that can happen that not everyone can think of everything. Its in part why most insurers like to write on an insured peril because the default position is that it isnt covered unless the policy says it is (-v- all risks).

Take a recent claim in the US... windstorm (not a covered peril) took out power lines (loss of power is covered) which resulted in AC units failing which resulted in major moulde damage (excluded peril) as humidity without AC was near enough 100%. So does the policy respond because the cause was loss of power or does it decline as the damage to the building and stock was moulde growth? (Claim was accepted if your interested).

Write a short plain english policy and you get the thumbs up from most but means a lot of detail is missing. Long full legalese contracts give much more certainty but is harder for people to read.

Annemos said:

Technical teams within an Insurance Company or MGA, not taking calls or not dealing with customers, means they can miss what is actually going on at Consumer level. (Or are actually not interested.) I am not convinced that there is always feedback, from the Front-line folks and also the Claims handlers, back to those Technical Teams when questions have arisen. The customer may have to push really hard to break through to the actual technical decision makers on a policy. 

Technical Claims... there are many more technical teams outside of claims and I'd be less likely to argue that a customer buying an annuity should be able to speak to one of the longevity actuaries to enable them to argue their life expectancy should be lower than what the quote suggests.

For the Claims guys there normally is communication however quality of comms isnt always there and the technical guys (which is what I used to be) can be slightly ivory tower in nature both towards their colleagues and customers. Obviously not all, I was always happy speaking to customers.

Annemos said:

But the more fragmentation there is, the more there is room for service levels dropping and customers being treated unfairly. (Delegated authority chains. Claims companies going after everything they can get their hands on.)

I get the impression that they are having some problems retaining people these days within Insurance and there is also a lot of poaching going on. So, continuity must be a problem. Contractors can also be treated poorly by the Insurance model. 

I have always imagined, that if you create an industry that is founded on ethics and values and you reinforce that idea at the Corporate level, then people will want to work within your company and be proud to work within it (as long as you train and educate them and their pay is not rubbish!). They will also give a great service to the Customers. 

I had a chat with somebody about this recently, who knows about Insurance and she said ..... "I am not sure that idea works these days. That's Capitalism for you". (That is to say... it is all just a big business.)

(And, as you have said in the past, people have also been encouraged to shop around to the n'th degree, to get the cheapest policy.) 

It just makes me feel sad to see what is going on sometimes. I really want to love and respect the Insurance Industry..... and also I want to trust it at all stages within the life of a policy. 

I'd agree that fragmenting business, rather than fully vertically integrated, risks service levels because of the handoffs but even if a company does everything internally that doesnt stop different departments existing and needing to workk together on matters. 

Delegating authority certainly doesnt automatically result in poor service or failing to treat customers fairly. Many delegated authority schemes are to target certain niches or segments and so those customers would generally be poorly served were it not for the delegation or at a minimum are unharmed by having more options of who to buy from. 

Call centres always have issues retaining people and so any insurer that operates a call centre (which all consumer insurance does) is going to have challenges. Call centre are the sweatshops of the developed world, I did over a decade in them across all sort of industries inc Insurance. 

In my first proper job in insurance we had 16,000 call centre agents, average age was circa 21, Salary was comfortably over NMW (about £5.77 -v- NMW of £4.50 at the time). Lots were uni students who would come and go with uni holidays or when they graduate. Team Managers typically had a very long tenure and so you may get 1 or 2 a year in a centre with a few thousand being potentially interested in the job hence people leave for promotions elsewhere

Not sure about your comment on contractors? As in working for an insurer or buying insurance as a contractor? I've done the later for over a decade and how you are treated does vary a little between companies but the reality is you arent an employee and so shouldnt be invited to the employee Xmas party etc. Insurance is better paying than retail banking but below investment banking, wealth and asset management. 

It being big business is not all bad, you pay your premiums and you know your claims are going to be paid. There arent many mutual insurers left but the one area where they are still prevalent is in P&I insurance (a form of marine insurance). However in this field you can be subject to cash calls, if the premiums arent proving sufficient to cover the claims then everyone is asked to contribute more... one P&I club had to do 3 supplimentary calls in a row at about 35%. So if you'd insured your boat and paid a £1,000 premium you suddenly had to pay an extra £350. Its the downside of members backing the business rather than shareholders and other capital providers.

Annemos

Many thanks for your time and full explanations, DGG. Always highly appreciated. 

The contractors issue... it is when they work for the Claims Handling Company and are forced into giving a less than good service. This is a quote from a Building Company "We took Insurance work on, but then we stopped doing it after only a few weeks. We could not work within their parameters. We want to do a better job than they are prepared to pay for. And our customers expect us to do a good job". 

In my experience, Delegated Authority is quite widespread in the ordinary Home Insurance sector. (MGA's). I had a very bad experience, indeed. I had never heard of the concept, until I fell foul of it and you so admirably explained it all to me. (Totally unexpected for me with my SAGA Premier Home Policy!)

People pay their premiums, but there any plenty of reviews on line of people not getting a sufficient pay-out from certain Claims Handling Companies and then having to go into battle over it. It is gratifying when people update those reviews and say they succeeded in getting an increase. But I know what it takes out of you as a customer, to fight back against the system. 


Your storm example. Things can indeed be intricate. I had a similar thing on a smaller scale with my Subsidence Claim. It went along for 2 years and then they messed up the repairs and badly damaged the walls of my building. So I halted everything and put in a megga complaint.

It was in the 3rd year, as this was all still rumbling on (claim not yet closed, luckily), that my water main burst. The first reaction of the Claim Handler was .... you need to open up a new and separate claim for escape of water! I had my usual umpteenth moan, this time about it having to be a new claim. They then did investigations and it was was shown to be in the same area that their bodging Contractors had been working in and also where the Subsidence had been. So it was fortunately agreed to treat it as part of the Subsidence claim. (It had happened in the same area as the Subsidence. And the pipe was not old enough to be likely to have had a sudden leak.)

What annoyed me, is that they did not say, right at the outset..... "we are going to have to check if this can be treated as part of the Subsidence claim itself". And this was a very experienced Claim Handler. When I spoke to the the FOS about this in passing, FOS also said this is what they would be expecting... that it would indeed be treated as part of the Subsidence Claim. 

It is as if they just hope that we consumers will not have the gumption, to ask for the right thing to be considered! Am I being unfair??