Help with loss adjustor assessment of damage caused by builders

alstemp

Hi MSE folks, long post . . . 

I undertook complete refurbishment of a 3 bed flat (mine) with a building firm at substantial investment and work took 6 months

Following completion of works in Dec 2023 I moved in and a couple of months later I noticed some rising damp in the hallway which gradually spread to 90% of the property.  Damage includes peeling paint work, skirting board debonding,  skirting board rotting, water under LVT flooring, water under carpet, mould. It’s a mess.

Long story short, following surveys by specialist water damage firm, the cause was found to be substantial leak in cold water pipework.  The building firm located the broken pipe and fixed it - they also accepted liability and to return to repair all water damage and make good as required once the flat had dried out.

So their business insurers got involved, Direct Line who made me aware that should liability be admitted, my claim would be settled on an indemnity, not on a new for old basis. 

Burden of proof being on me etc, I sent them follow up letter detailing damage and breach of contract under Consumer Rights Act 2015 and supporting survey reports and photographs.. 

Direct Line have contacted me to say due to extent of damage they are engaging a loss adjustor to assist with liability and costs of the claim and that loss adjustor will be in touch..

i have never been through anything like this process before, am somewhat ignorant of the ramifications and have questions - grateful for any feedback, help, advice that can be offered.

- if the builder has accepted liability for the damage caused, why can’t they just come back and fix everything and claim the costs back from Direct Line themselves? 

- It sounds like Direct Line will use the loss adjustor to come up with a figure to make good everything and then make a payout to me etc.  Should I be getting some quotes from other builders to make good, otherwise how will I know the amount they’re offering will pay to get the damage fixed?

- I’d like to use original builders as they know everything about the flat, including wiring, plumbing, gas etc.  If I used them does that essentially mean I’d be using the payout from Direct Line to pay them to make good?

- The original builders have said they will come back but what are the chances they will? Could they say no? are they legally obliged to return if they caused the damage in the first place?

- Anything else I need to be aware of or to look out for?  Don’t want to get caught out by anything.

Thanks in advance for your help.

DullGreyGuy

alstemp said:

Hi MSE folks, long post . . . 

I undertook complete refurbishment of a 3 bed flat (mine) with a building firm at substantial investment and work took 6 months

Following completion of works in Dec 2022 I moved in and a couple of months later I noticed some rising damp in the hallway which gradually spread to 90% of the property.  Damage includes peeling paint work, skirting board debonding,  skirting board rotting, water under LVT flooring, water under carpet, mould. It’s a mess.

Long story short, following surveys by specialist water damage firm, the cause was found to be substantial leak in cold water pipework.  The building firm located the broken pipe and fixed it - they also accepted liability and to return to repair all water damage and make good as required once the flat had dried out.

So their business insurers got involved, Direct Line who made me aware that should liability be admitted, my claim would be settled on an indemnity, not on a new for old basis. 

Burden of proof being on me etc, I sent them follow up letter detailing damage and breach of contract under Consumer Rights Act 2015 and supporting survey reports and photographs.. 

Direct Line have contacted me to say due to extent of damage they are engaging a loss adjustor to assist with liability and costs of the claim and that loss adjustor will be in touch..

i have never been through anything like this process before, am somewhat ignorant of the ramifications and have questions - grateful for any feedback, help, advice that can be offered.

- if the builder has accepted liability for the damage caused, why can’t they just come back and fix everything and claim the costs back from Direct Line themselves? 

- It sounds like Direct Line will use the loss adjustor to come up with a figure to make good everything and then make a payout to me etc.  Should I be getting some quotes from other builders to make good, otherwise how will I know the amount they’re offering will pay to get the damage fixed?

- I’d like to use original builders as they know everything about the flat, including wiring, plumbing, gas etc.  If I used them does that essentially mean I’d be using the payout from Direct Line to pay them to make good?

- The original builders have said they will come back but what are the chances they will? Could they say no? are they legally obliged to return if they caused the damage in the first place?

- Anything else I need to be aware of or to look out for?  Don’t want to get caught out by anything.

Thanks in advance for your help.

First of all... remember the Direct Line are the builder's insurers not yours, their duty is to protect their client from your claim against them not to you. 

1) The insurer is the one that is highly knowledgable on torte of negligence and contract law so are much better placed to decide if their client is liable or not. If the builder admit to drilling into the pipe then it's just a formality and it will come to the same conclusion. Having dealt with claims for a few years at the start of my career some people have very strange ideas of what is and isnt their fault. 

Insurers deal with millions of claims a year, many maintain networks of preferred suppliers who give volume discounts  based on the steady flow of work insurers can supply. 


2) DL may do a cash settlement or they may instruct their own suppliers to fix the work. As a third party you have more say here than you would as a policyholder. It would be prudent to get some quotes in the interim, though I wouldn't say that its for an insurance claim when you do so.

3) Yes, if thats what you did

4) No, their insurers will have settled their legal obligation to you. The rework would be a new contract which either party is free to decline to enter into

5) Make sure you understand the full details of the proposed settlement before accepting it, in particular what would occur if further damages were discovered during the renovation and if there are any funnies around VAT - some insurers will cash settle net of VAT and you then claim the VAT from them separately after you've evidence you paid it up to the maximum VAT of the original settlement. 


Note that as a third party claimant you do not have the right to go to the Ombudsman if you are unhappy with Direct Line. They are also correct in telling you its indemnity not new for old as a third party claimant.