Home insurance question for joint ownership?

MyRealNameToo

Grey_Critic said:

Since CIDRA came in they have to ask you anything they want to know, they cannot rely on you volunteering information. Sure, if it's a total loss they may investigate ownership but that doesnt mean you had to inform them beforehand. 

Just remember there is such a thing as refusal to insure - try playing games and they have the ultimate weapon they can Blacklist you and insurers do share information 

Refusal to insure is almost a dead duck and harks back to the days of the broker doing the quote, selling you the policy and giving you a cover note before sending all the paperwork off the the insurer to issue the certificate of insurance who then declined. 

Now its all straight through processing so you dont get cases of people being declined in the same way, instead you get companies declining to quote but that isnt asked about because everyone who's ever filled in a confused.com form will have had dozens of companies declining to quote every time. Saga always decline to quote for me as I am not over 55. 

Insurers would be a torn a new one if they attempted to void a policy for not declaring additional owners when they have not asked the question during the quote process. 

Smithcom

MyRealNameToo said:

Grey_Critic said:

Since CIDRA came in they have to ask you anything they want to know, they cannot rely on you volunteering information. Sure, if it's a total loss they may investigate ownership but that doesnt mean you had to inform them beforehand. 

Just remember there is such a thing as refusal to insure - try playing games and they have the ultimate weapon they can Blacklist you and insurers do share information 

Refusal to insure is almost a dead duck and harks back to the days of the broker doing the quote, selling you the policy and giving you a cover note before sending all the paperwork off the the insurer to issue the certificate of insurance who then declined. 

Now its all straight through processing so you dont get cases of people being declined in the same way, instead you get companies declining to quote but that isnt asked about because everyone who's ever filled in a confused.com form will have had dozens of companies declining to quote every time. Saga always decline to quote for me as I am not over 55. 

Insurers would be a torn a new one if they attempted to void a policy for not declaring additional owners when they have not asked the question during the quote process. 

There's some really poor advice being provided on this thread.

Let's ignore for one second the issue of disclosure re additional owners.   As has been already pointed out, CIDRA requires insurers to ask any relevant questions, and if they don't, they cannot use this lack of disclosure to avoid cover.

However, and this is the point that is generally being missed, the policyholder can only claim for the extent of their loss.   If the OP owns 33.3% of the house, then the policy will only be obliged to pay 33.3% of a claim.   That's all the OP would have lost.

Really, the solution is to have a separate Buildings policy with all 3 owners noted.   There's also potential additional risks to the 2 non-occupying owners with regards to Property Owners Liability, but possibly that's a risk they can live with.

Ultimately, nothing can go wrong with the current arrangements.........until they do.

Careful insurance placement required.

SC

MyRealNameToo

Can you point to a single claim/complaint where this has come up?

Or even one policy book which states its capped at your percentage of ownership rather than the declared value?

Given insurers do not ask about ownership of the property you would expect the FOS to have thousands of cases where the insurer has written a £600k limit but only paid out £200k because it discovered the policyholder was only 1/3 owner and yet I can't see a single one. 

Smithcom

MyRealNameToo said:

Can you point to a single claim/complaint where this has come up?

Or even one policy book which states its capped at your percentage of ownership rather than the declared value?

Given insurers do not ask about ownership of the property you would expect the FOS to have thousands of cases where the insurer has written a £600k limit but only paid out £200k because it discovered the policyholder was only 1/3 owner and yet I can't see a single one. 

I cannot be bothered finding a relevant case for you.   I don't know what your day job is, but I'm presuming that it's not law or insurance.   

If I take out a policy for my neighbour's house, the insurer will not ask me about ownership.  If the house burns down, I will not have lost anything.   That's because of lack of 'insurable interest'.

I've seen many claims turned down because of lack of insurable interest. 

Ultimately, if the OP owns 1/3 of an asset, that will be the extent of their loss if the asset is damaged.

Insurance needs to be purchased with great care, because the results can be very damaging in the event of a claim being declined, and/or a policy cancelled.

SC

MyRealNameToo

Smithcom said:

MyRealNameToo said:

Can you point to a single claim/complaint where this has come up?

Or even one policy book which states its capped at your percentage of ownership rather than the declared value?

Given insurers do not ask about ownership of the property you would expect the FOS to have thousands of cases where the insurer has written a £600k limit but only paid out £200k because it discovered the policyholder was only 1/3 owner and yet I can't see a single one. 

I cannot be bothered finding a relevant case for you.   I don't know what your day job is, but I'm presuming that it's not law or insurance.   

If I take out a policy for my neighbour's house, the insurer will not ask me about ownership.  If the house burns down, I will not have lost anything.   That's because of lack of 'insurable interest'.

I've seen many claims turned down because of lack of insurable interest. 

Ultimately, if the OP owns 1/3 of an asset, that will be the extent of their loss if the asset is damaged.

Insurance needs to be purchased with great care, because the results can be very damaging in the event of a claim being declined, and/or a policy cancelled.

I'll read that as you did look, couldn't find any because they dont exist and so try to hide the fact. 

So you think someone with a 1/3 ownership of a property has no insurable interest? 

There are plenty of FOS cases on no insurable interest, we've also had cases on here, a reasonable proportion are around small businesses and mixing up if the company or director. There are none on co-ownership and first hand experience of a large fire claim was paid out on a tenants in common property to the sole named policyholder. 

Smithcom

I'll read that as you did look, couldn't find any because they dont exist and so try to hide the fact. 

So you think someone with a 1/3 ownership of a property has no insurable interest? 

There are plenty of FOS cases on no insurable interest, we've also had cases on here, a reasonable proportion are around small businesses and mixing up if the company or director. There are none on co-ownership and first hand experience of a large fire claim was paid out on a tenants in common property to the sole named policyholder. 

You're welcome to take it is you see fit.    But you are wrong, again.

No, I didn't state that someone with 1/3 ownership has no insurable interest.  Their insurable interest extends to 1/3.  That's not an opinion, that is simply a fact.

Ultimately, if the policyholder is Mr A, and if Mr A's loss is effectively 1/3 of the building, that's all the policyholder will have lost, and that's all the insurer will be obliged to pay.

Possibly, on a small claim, insurers may never find out the factual situation.

To summarise, I think you are saying that an insurer will pay for the full extent of a loss, even if the policyholder's individual loss only equates to 1/3 of the total.   Really?    Seriously?

Depends on how lucky you feel I guess

All the best

SC

Smithcom

It's not an exactly identical situation, but see Decision Reference DRN6717602  re problematic claim regarding insurable interest.

There's other cases (and legal discussions) regarding the issue of insurable interest on the internet.

MyRealNameToo - your advice on this forum is genuinely worrying, and assumes the benevolent nature of insurers to pay for a claim beyond the extent of their policyholder's loss.

In my extensive experience, I haven't come across too many benevolent insurers.

SC 

MyRealNameToo

Smithcom said:

It's not an exactly identical situation, but see Decision Reference DRN6717602  re problematic claim regarding insurable interest.

There's other cases (and legal discussions) regarding the issue of insurable interest on the internet.

MyRealNameToo - your advice on this forum is genuinely worrying, and assumes the benevolent nature of insurers to pay for a claim beyond the extent of their policyholder's loss.

In my extensive experience, I haven't come across too many benevolent insurers.

SC 

That is a totally unrelated matter, they insured a property under a landlord policy when actually a LTD owned the property. I already acknowledged there are many cases on the FOS and several on here where people have done similarly. 

We are explicitly talking about co-ownership and stating that the insured can only claim up to their proportion of ownership despite the policy documents stating they are insured for the full rebuild value of the property with no reference to proportion owned. Remembering that ownership is not the only mechanism that creates insurable interest.

It would be unprudent to rely on benevolence of an insurer but there are plenty of examples on here of it... look at any thread on NCDs and you'll see many accounts of insurers allowing the widow(er) to inherit their deceased spouses entitlement.  You can however rely on legislation and on the terms in the policy book rather than benevolence. 

Smithcom

MyRealNameToo said:

Smithcom said:

It's not an exactly identical situation, but see Decision Reference DRN6717602  re problematic claim regarding insurable interest.

There's other cases (and legal discussions) regarding the issue of insurable interest on the internet.

MyRealNameToo - your advice on this forum is genuinely worrying, and assumes the benevolent nature of insurers to pay for a claim beyond the extent of their policyholder's loss.

In my extensive experience, I haven't come across too many benevolent insurers.

SC 

That is a totally unrelated matter, they insured a property under a landlord policy when actually a LTD owned the property. I already acknowledged there are many cases on the FOS and several on here where people have done similarly. 

We are explicitly talking about co-ownership and stating that the insured can only claim up to their proportion of ownership despite the policy documents stating they are insured for the full rebuild value of the property with no reference to proportion owned. Remembering that ownership is not the only mechanism that creates insurable interest.

It would be unprudent to rely on benevolence of an insurer but there are plenty of examples on here of it... look at any thread on NCDs and you'll see many accounts of insurers allowing the widow(er) to inherit their deceased spouses entitlement.  You can however rely on legislation and on the terms in the policy book rather than benevolence. 

I don't really have anything more to say on this.  Any policyholder who buys insurance in the manner that you suggest is running a massive risk.   Ultimately, you would be relying on an insurer paying out to a policy holder who has only a 1/3 financial interest in the loss.    Personally, I would say that's complete madness, and any broker knowingly placing a policy in this manner, to which a subsequent issues arises, would almost certainly be culpable. 

You acknowledge that 'It would be imprudent to rely on benevolence of an insurer'.   This is the only statement that I can agree with.

Yes, an insurer may allow a widow(er) to take over an NCD, but this is a long-standing industry tradition, and does not affect the insurer's claims pot.   Insurers currently are working very hard to avoid 'claims leakage'

Furthermore, the other parties to the OP's arrangement are not the spouse.

Seriously, please don't advise anyone to do what you are suggesting.   It will end in tears. 

SC

MyRealNameToo

Smithcom said:

MyRealNameToo said:

Smithcom said:

It's not an exactly identical situation, but see Decision Reference DRN6717602  re problematic claim regarding insurable interest.

There's other cases (and legal discussions) regarding the issue of insurable interest on the internet.

MyRealNameToo - your advice on this forum is genuinely worrying, and assumes the benevolent nature of insurers to pay for a claim beyond the extent of their policyholder's loss.

In my extensive experience, I haven't come across too many benevolent insurers.

SC 

That is a totally unrelated matter, they insured a property under a landlord policy when actually a LTD owned the property. I already acknowledged there are many cases on the FOS and several on here where people have done similarly. 

We are explicitly talking about co-ownership and stating that the insured can only claim up to their proportion of ownership despite the policy documents stating they are insured for the full rebuild value of the property with no reference to proportion owned. Remembering that ownership is not the only mechanism that creates insurable interest.

It would be unprudent to rely on benevolence of an insurer but there are plenty of examples on here of it... look at any thread on NCDs and you'll see many accounts of insurers allowing the widow(er) to inherit their deceased spouses entitlement.  You can however rely on legislation and on the terms in the policy book rather than benevolence. 

Yes, an insurer may allow a widow(er) to take over an NCD, but this is a long-standing industry tradition, and does not affect the insurer's claims pot.   Insurers currently are working very hard to avoid 'claims leakage'

You seem to forget how the claims pot is filled in the first place.