Is Insurance Fit For Purpose?

darrenwalton

We recently had our insurance voided when we tried to make a claim on it. We took out the insurance in good faith, making sure that we provided the right information when we completed the application form (the proposal, as they call it). You can find out the details of our plight with Broker Direct PLC, which is ongoing on my blog (waltoncloud.com/?p=498) if you want to.

I didn't come here just to ask for support on our plight - it would be dishonest if I said I didn't want as much support as we can get - I came here because it is my belief that insurance should provide the cover that you intend to use it for.

For example, if your car gets written off because someone else crashed into it (not your fault, in other words) you should get a direct replacement, including the warranty and extra bells and whistles. What tends to happen there is the insurer offers the trade price for a similar car and you have to barter to get more - yes, you have to barter! You paid for a policy to provide a replacement, didn't you, but you have to barter to get what you have already paid for!

I had a car written off. I ended up with some claims company because my own insurance company was so terrible. I won't go into detail about the costs that every company charged for hire cars and vehicle repairs but I think it is fair to say that if you were quoted those prices by those companies for normal work, you would take your custom elsewhere where the prices are reasonable! Insurance claims seems to be its own little cottage industry where pricing is in the realms of fantasy.

In our case, our insurance company, Broker Direct PLC, have voided our policy because they claim we have got underpinning on our property and we said we don't have it. They have not proven their claim that we have and they have not taken me up on my question about using a structural engineer to determine whether there is any underpinning. They just saw it mentioned on our Home Buyers report because we were concerned that there might be underpinning at the time we had a survey done. As I have mentioned, you can read about it on my blog if you want to.

There must be thousands of others who have ended up in the same situation. Are you one of them?

If there are enough people I will start a petition with the hope of getting this raised, in detail, at parliament. I feel sick whenever I have to deal with insurance because of the stress it causes and this time enough is enough!

MorningcoffeeIV

darrenwalton said:

For example, if your car gets written off because someone else crashed into it (not your fault, in other words) you should get a direct replacement, including the warranty and extra bells and whistles. 

I'm not sure how much appetite there would be amongst customers to pay the much higher premiums for that level of service. 

Not to mention the arguments over whether the car they eventually source with it various 'bells and whistles' is a direct replacement or not - because it's a darker blue, has done a higher mileage or has different coloured seats.

I'd imagine the whole process would take months.  I'd much rather take the cash and sort out my own replacement - I may not even want the same car again (or any car) and I definitely wouldn't want to wait months to get it.

dunstonh

They just saw it mentioned on our Home Buyers report because we were concerned that there might be underpinning at the time we had a survey done. 

If that was the middle option between valuation and full survey, then they are more damaging than they are worth.  They are usually full of pointless warnings like "may be present".       Japanese knotweed for example even with no evidence of it visible or noted elsewhere.  Or asbestos in the kitchen or movement/subsidence etc.    

They are a complete waste of money, and in this case, it has affected you.

Your case seems ripe for a FOS referral after your complaint was rejected.

darrenwalton

dunstonh said:

They just saw it mentioned on our Home Buyers report because we were concerned that there might be underpinning at the time we had a survey done. 

If that was the middle option between valuation and full survey, then they are more damaging than they are worth.  They are usually full of pointless warnings like "may be present".       Japanese knotweed for example even with no evidence of it visible or noted elsewhere.  Or asbestos in the kitchen or movement/subsidence etc.    

They are a complete waste of money, and in this case, it has affected you.

Your case seems ripe for a FOS referral after your complaint was rejected.

Ours was a full survey.

dunstonh

darrenwalton said:

dunstonh said:

They just saw it mentioned on our Home Buyers report because we were concerned that there might be underpinning at the time we had a survey done. 

If that was the middle option between valuation and full survey, then they are more damaging than they are worth.  They are usually full of pointless warnings like "may be present".       Japanese knotweed for example even with no evidence of it visible or noted elsewhere.  Or asbestos in the kitchen or movement/subsidence etc.    

They are a complete waste of money, and in this case, it has affected you.

Your case seems ripe for a FOS referral after your complaint was rejected.

Ours was a full survey.

A full survey (level 3) is usually careful with its wording.   You would expect it to say why they think there could be underpinning and that a structural engineers report is recommended.    Most surveyors will write in a way that avoids ambiguity and propose solutions/methods to find out.

You are also in a difficult situation with this because you knew that there could be underpinning as a full survey said there might be.   But you told the insurer that there wasn't.

So, a structural engineer's report, at your cost, would be the logical thing to do.  Indeed, it would have been the logical thing to do before buying the place.  (you may even have recovered the cost from the vendor in your negotiating.  We did - both the cost and remedy).

Hoenir

darrenwalton said:

They have not proven their claim that we have and they have not taken me up on my question about using a structural engineer to determine whether there is any underpinning.

You said that there wasn't when entering into the insurance contract. Insurance contracts being entered into under the auspices of the principles of utmost good faith. 

A term where both the policyholder and the insurer agree not to withhold information or provide false information that could affect the policy.

user1977

Hoenir said:

darrenwalton said:

They have not proven their claim that we have and they have not taken me up on my question about using a structural engineer to determine whether there is any underpinning.

You said that there wasn't when entering into the insurance contract. Insurance contracts being entered into under the auspices of the principles of utmost good faith. 

A term where both the policyholder and the insurer agree not to withhold information or provide false information that could affect the policy.

I thought that no longer applied to consumer products, and the insurers have to actually ask the question?

DullGreyGuy

darrenwalton said:

For example, if your car gets written off because someone else crashed into it (not your fault, in other words) you should get a direct replacement, including the warranty and extra bells and whistles. What tends to happen there is the insurer offers the trade price for a similar car and you have to barter to get more - yes, you have to barter! You paid for a policy to provide a replacement, didn't you, but you have to barter to get what you have already paid for!

You are mixing up different things here...

If you claim off your own insurance following an accident you are bound by the terms and conditions of that policy. If that policy says you should get a direct replacement then absolutely thats what you should get (and many do so for 1st owners under 1 year old). If you are at fault or not at fault makes absolutely no difference what so ever as the terms are what the terms are. 

A good few years ago I did a piece of work for an insurer to look into introducing "guaranteed valuation" to mass market consumer insurance. So rather than insuring it for "Market Value" and debating what that is later you would instead select a price based from a basic valuation from one of the major valuation guide. We then price on that basis and in 9 months if your car is stolen and unrecovered you simply get that price less the excess.

The problem was two fold, firstly we needed to know the mileage of the car as it has a major impact on valuation and that was seen as a show stopper that would make people go elsewhere. Secondly we'd need to increase the price a modest amount (even if you left the value at the book price) and at the time they were looking at ways to cut prices not increase them. The idea was never put into practice, I did get an offer to do it with someone else but on an equity basis and I could afford to go a year or two with no material salary. 


A non-fault accident has almost nothing to do with insurance, what rights you have to claim off the third party isn't bound by any policy book but as a common law country is based on legal precedent as decided by the courts, mainly under the tort of negligence. As a non-fault claim you are only entitled to indemnification which means if your car didnt have a warranty or bells and whistles then the third party insurer isn't liable to pay you for a warranty etc as that would be betterment. 

darrenwalton

dunstonh said:

darrenwalton said:

dunstonh said:

They just saw it mentioned on our Home Buyers report because we were concerned that there might be underpinning at the time we had a survey done. 

If that was the middle option between valuation and full survey, then they are more damaging than they are worth.  They are usually full of pointless warnings like "may be present".       Japanese knotweed for example even with no evidence of it visible or noted elsewhere.  Or asbestos in the kitchen or movement/subsidence etc.    

They are a complete waste of money, and in this case, it has affected you.

Your case seems ripe for a FOS referral after your complaint was rejected.

Ours was a full survey.

A full survey (level 3) is usually careful with its wording.   You would expect it to say why they think there could be underpinning and that a structural engineers report is recommended.    Most surveyors will write in a way that avoids ambiguity and propose solutions/methods to find out.

You are also in a difficult situation with this because you knew that there could be underpinning as a full survey said there might be.   But you told the insurer that there wasn't.

So, a structural engineer's report, at your cost, would be the logical thing to do.  Indeed, it would have been the logical thing to do before buying the place.  (you may even have recovered the cost from the vendor in your negotiating.  We did - both the cost and remedy).

I think you may be confused. We had a full survey which said there are NO signs of any repairs being carried out to the brickwork which would usually be visible if any underpinning had been carried out.

It did also say that an inspection would need to be completed by a structural engineer to confirm that there has or has not been any underpinning, however, having spoken to a structural engineer they said they would need to know specifically where to look on the whole of our property for the underpinning.

It was after his report that the previous owner found paperwork relating to the time that the council claims work was carried out and that paperwork had no mention of underpinning. Why would paperwork exist for one thing and not the other?

AnnikaJuarez

You're right to expect that insurance should cover what it's supposed to without a lot of stress or having to argue for a fair payment. The problems you've run into show that the insurance world really needs to change to make sure insurance does what it promises more clearly and fairly.

DullGreyGuy

AnnikaJuarez said:

You're right to expect that insurance should cover what it's supposed to without a lot of stress or having to argue for a fair payment. The problems you've run into show that the insurance world really needs to change to make sure insurance does what it promises more clearly and fairly.

You say that but when people complain to the Financial Ombudsman about motor insurance only 29% of cases are partially or fully upheld which means that for more than 70% of the cases the Ombudsman felt the insurer was being fair. 

Seems a little odd to say it's the insurers that need to change when an independent body says it's the customer that is wrong in more than double the cases @annikajuarez doesn't it? The problem is people overvalue their stuff, I think guaranteed value car insurance would be a good idea but when most customers will switch from an ethical household name to an unknown overseas outfit to save less than £2 a year the idea of trying to push a product for 5% more seems a uphill struggle especially as historically claims based advertising has always done poorly. For Home it would be even more difficult, having to pre-agree what an appropriate replacement for your 10 year old previously top of the range HD LG TV is etc.