Home Insurance Cancelled After Claim

DancingBadger

Last autumn we had a water leak caused by a corroded mains water pipe. The pipe wasn't visible. and we only realised there was a problem when water started seeping through the floorboards (the hole was tiny; the plumber said it had probably been leaking slowly and undetected for months, but it did a lot of damage).

(The company appointed by the insurers to oversee the repairs and some of their sub-contractors were a nightmare, totally disorganised, but I'm not sure if that's relevant.)

The cost of the reinstatement came in at just over £19,500, and today I received an email stating our risk profile has changed and that the insurers (Lloyds Bank) are therefore cancelling the insurance w.e.f. next week.

(We did have another buildings claim in 2021 with our previous insurers which was declared when we took out the cover with Lloyds.)

I'm aware cancelled insurance has repercussions in terms of increased premiums and the requirement to declare it for evermore, and would really appreciate any advice.

Boohoo

https://forums.moneysavingexpert.com/discussion/6664159/home-insurance-cancelled-after-claim

Count your self lucky that the insurance paid for the work to be done.

Have they not renewed the policy or just cancel it asap?

Just saw the bit about next week so I would call a broker and see what is on offer as at least you can explain things.

Not sure if you can get insurance through comparison sites if your policy has been cancelled though.

DancingBadger

Isn't that the point of insurance, though - that the claim should be paid? If there had been a condition imposed as the limit of the cost of any claim we would have least understood the cancellation. Equally, I could have understood the cancellation if we were at fault in some way.

We're being penalised for something over which we have no control or right of reply.

If anything, the cost of the claim would have been ramped up by the company appointed by the insurers to undertake the reinstatement work.

The only time I used a broker (years ago) it appeared the agent was asking the same questions as the comparison sites and typing in the answers - and coming back with prices way above the comparison sites. Is there really an advantage to using brokers?

Boohoo

You will have to speak to the insurance company to find out why they have cancelled your policy midway as that info may help you in getting a new policy. They may not tell you the reason though.

As for using brokers I thought they had more scope in searching insurance firms than a comparison site.

I used a comparison site for an old neighbour as her insurance cancelled the policy midway and when I did a comparison it gave lots of prices but when I started a quote and put in the details it got to the part of a cancelled insurance and quote stopped and said something like you need to contact the insurance companies directly.

Have you tried to get home insurance yet and stated your policy was cancelled?

If yes how did you get on?

flaneurs_lobster

I wonder if the loss adjuster/surveyor have identified an issue over and above your specific leak that makes them think that future claims would be likely? Hence no longer want to offer coverage.

We had a similar problem with our (only) bathroom, long-established leak did enough damage that the bathroom had to be completely gutted back to brickwork and re-installed. Refurb cost was £40k and we were accommodated elsewhere for 10 weeks at whatever that cost.

Insurance continued, although not surprisingly the premium tripled on renewal.

DancingBadger

https://forums.moneysavingexpert.com/discussion/comment/81963361#Comment_81963361

The email I received yesterday from the AA said, "due to the value of your claim, your current insurers, Lloyds Bank, are no longer able to provide cover."

AA also stated they had searched their panel of insurers and were unable to provide cover with an alternative insurer.

It's awful because they've effectively made us insurance pariahs even though we've done nothing wrong - other than make a claim, that is.

I've managed to get three quotes so far - one through Adrian Flux with Aviva for £790 and another via Comparethemarket with the Post Office for £417. The third one was through Intelligent Insurance and came in at over £1000. It seems that brokers have more scope to search the market, but their premiums are usually much higher. (That said, and in all fairness to them, Adrian Flux did come up with the second cheapest premium when I needed to insure an empty house while awaiting probate.)

DancingBadger

The reason given for cancellation was the value of the claim, nothing else. We had an initial visit from an assessor to assess the damage and advise the insurers as to the reinstatement work, but that was it.

I was expecting the renewal premium to be hefty, but not cancellation. It seems unfair.

dunstonh

If the policy is being cancelled, then it is a notifiable event you need to declare to all new providers. if they are not renewing it, that is not a cancellation, so its not a notifiable event.

I've managed to get three quotes so far - one through Adrian Flux with Aviva for £790 and another via Comparethemarket with the Post Office for £417. The third one was through Intelligent Insurance and came in at over £1000. It seems that brokers have more scope to search the market, but their premiums are usually much higher. (That said, and in all fairness to them, Adrian Flux did come up with the second cheapest premium when I needed to insure an empty house while awaiting probate.)

Most people go through life with no buildings insurance claims. You have had two in quick succession. So, the reality is that you are a higher risk. It is never personal. It is just the commercial reality.

I've managed to get three quotes so far

Make sure you are disclosing the cancellation.

DancingBadger

https://forums.moneysavingexpert.com/discussion/comment/81963745#Comment_81963745

It's been cancelled mid-term so definitely notifiable, unfortunately - and as I understand it, will also need to be notified to our other insurers (although it seems a bit of a stretch to translate a buildings claim into a heightened risk for our motor and boat insurers).

Definitely making full disclosure; we're actually very risk averse, even if Lloyds Bank's underwriters would disagree. In event of a claim I would imagine all insurers double-check for non-disclosure before making payment, so it's always beyond me why people "forget" previous incidents and take the risk of invalidation.