Home insurance claim for flood - don't know what to expect

1122abc

My parents had a leak from their attic two weeks ago. It has caused damage throughout the house. A claim was put in on the day after the leak.

Currently involved are:
1. insurance company 
2. another company to manage the buildings claim
3. a building contractor who has been hired by the above number 2
4. a company to manage the contents claim
5. a company to source alternative accommodation 

A loss adjuster was sent out by party number 2 and visited 5 days after the flood. They submitted suggested works 3 days ago (10 days after the flood). They said we need to move out completely and works may take 3-4 months.

party number 2 say that the claim is with the validation team with no advice on how long this will take.

party number 1 says that the claim needs to be validated by number 2 (which can take several days) and then passed to their in house surveying team. 

I am not sure what to expect in terms of timeline. I don't understand the difference between party 1 and 2. So both party 1 and 2 have to assess the works needed? 

The house is getting further damaged, the leak has stopped but the water damage continues

Would appreciate any insight as have never had to deal with something like this before

DullGreyGuy

It's not uncommon for insurers to outsource claims management to third party companies. The arrangements can vary significantly from 100% of claims going to the company through to just certain types of claims or only overflow claims when the insurers own teams are too busy.  These firms are known as TPAs.

What level of delegation happens also varies, for some the TPA has full control of all aspects of the claim and can settle a claim of any size. Some may have a cap, they can settle claims up to £100,000 but anything above that they have to refer. Some can settle claims but have to refer any declines. Generally there are benefits to delegation from a VAT perspective. 

Companies 4 & 5 could well be sister companies of 2 or totally independent. Due to insurance being exempt from VAT there can be benefits of having webs of companies rather than a single firm that does everything. 


In notable claims its not too uncommon for their to be a field person and a desk person with oversight of the claim. The former deals with the more practical aspects of the claim like suppliers, agreeing estimates etc, the other person the more administrative like ensuring cover is valid, liaising with the insurer if required. 

Unfortunately life can get even more complex as "1" in your setup sometimes isn't the insurer at all but some form of intermediary like an MGA and they too will have an agreed level of delegation on claims handling. This is where things can get slow as 2 has to ask 1 for permission who in turn have to ask "0", the true insurer, for permission, and then the yes/no has travel back down the chain. 


Hopefully they'll confirm everything is in order shortly and then commence with the remediation. 

Mark_d

Party 1 will check what your policy covers you for and decides what to pay out.  Party 2 is responsible for solving the buildings issue.

Move out of the house.  The work should take 3-4 month as you've been advised.  The house will need to be dried out completely before the most detailed assessments of the damage can be done, and the repair work undertaken.

DullGreyGuy

Mark_d said:

Party 1 will check what your policy covers you for and decides what to pay out.  

Not necessarily, a previous client was a "party 2" and with one client could settle claims up to £0.5m with no reference to Party 1 (beyond monthly bordereaux which contained details of every claim being handled by them)