Loss adjuster - doubled rebuild amount so halved claim payout

fineman

I'm trying to get a claim for water damage through my insurer (it is a landlord insurance as my property is let). I've used the standard BICS online too to get the rebuild value to I used when renewing the policy. However the loss adjuster has now claimed the property rebuild value is almost double this (almost exceeding the market value), so being underinsured they won't pay the claim in full and that if I want to dispute it I have to pay a chartered surveyor. What are my possible routes here? Anyone been in a similar situation?

ThorOdinson

First step is to complain officially to the insurer.

DullGreyGuy

fineman said:

I'm trying to get a claim for water damage through my insurer (it is a landlord insurance as my property is let). I've used the standard BICS online too to get the rebuild value to I used when renewing the policy. However the loss adjuster has now claimed the property rebuild value is almost double this (almost exceeding the market value), so being underinsured they won't pay the claim in full and that if I want to dispute it I have to pay a chartered surveyor. What are my possible routes here? Anyone been in a similar situation?

BCIS online is only a guideline and various factors that the basic free one doesn't ask about can significantly change costs. There is a subscription based version of the tool too which asks many more questions and in some circumstances can give wildly different values.

How long ago did you buy the property? Do you have the original survey from then which should state a rebuild cost which you could index to see how it compares?

The fact the rebuild is close to the market value means nothing, there are plenty of properties where the rebuild cost exceeds the value of the property by a long way... a house we lived in at Uni has a rebuild cost of £313,000, a near by house that looks very similar is on the market for offers over £118,000 (he bought it for £40,000)

Aretnap

Financial Ombudsman on this sort of thing.

https://www.financial-ombudsman.org.uk/businesses/complaints-deal/insurance/home-buildings-insurance/underinsurance-home-insurance-complaints

What guidance (if any) does (or did) the insurer give you on how to calculate the rebuild value? eg if the insurer's website suggests you use a BCIS calculator, that would be a reasonably good arguement that you should be able to rely on the result, unless they included some pretty clear caveats.

This case study also seems relevant.

https://www.financial-ombudsman.org.uk/decisions-case-studies/case-studies/consumer-complains-impact-underinsurance

fineman

Thanks everyone - that gives me a few directions to go in. As far as I can remember (I'll check) the BCIS tool I used is the one suggested by the insurer. I stupidly hadn't thought to check the survey - in 2007 the rebuild was estimated at 160k. At 5% increase per year that gets pretty much exactly to the value I got from BCIS helping confirm that I'm probably on the right lines. I'll go back to them with this, with the ombudsman as a backup plan.

DullGreyGuy

Unfortunately the HRC index is very volatile...



5% may work out as an average but there are periods of near 20%