Insurance cheque for carpet claim

pufc_66

Wondering if anyone can offer advice.
At a New Year's Eve party someone managed to spill a large glass of red wine over our 18 month old pure wool beige living room carpet. Plenty of salt went down but could not soak up the amount of wine. Result: a huge stain, not right in the middle of the floor, but not what you want in the living room. I contacted our insurers and they sent a company of professional carpet cleaners round to assess the damage. They took one look, didn't even attempt to try and clean it and said it needed replacing. We wanted a direct replacement from the store we bought it from (John Lewis) so sent off receipts/up to date price etc.

The insurance company were very good and sent a cheque for the full amount (£1400), payable to John Lewis - not to me. While I was waitng for this to be done I looked around on the net and found a variety of different methods for removing red wine stains from wool carpets. A little experimenting on a little patch led us to conclude that with a bit of time and effort we could clean it to an acceptable standard.

Question: what is the ethical thing to do now? The insuarnce company sent the cheque in full settlement. Do we contact them back and say we can clean it up and send the cheque back (thus reducing monthly payments as presumably this would then negate the no claims bonus)? Do we spend the money in John Lewis on something else - or is this classed as fraud? I am not sure because they have fully settled - do they care now what we spend the cheque on? Can we ask for a cash settlement instead? The last thing we really want to do is go to the hassle of removing all furniture, bookshleves etc and replace a nearly new carpet just for the sake of it. To be honest the most annoying thing is that the so called professionals didn't even attempt to clean it up.

Not sure what is the right course of action! Any ideas?

charmed-imsure

I would imagine that because the cheque is made out to John Lewis, therefore the insurance company would know you can't defraud them and keep it as cash, they'll have no receipt or anything for what you buy anyway because you get the receipt? I doubt they'll care too much because you'll be paying it back by way of increased monthly payments :-(

I'd probably keep the carpet you have, seems a waste if you can remove the stain anyway, buy a few nice things and if you get any change, buy a few crates of bicarbonate of soda incase it happens again!

pufc_66

I wondered about whether it would be defrauding them if we converted it to cash ie buy from John Lewis, sell on ebay. Is that fraud? Their liability to us was to pay the claim, once they have made final settlement is it up to us to do with the cheque as we will? I am loathe to spend all that money on things we don't want!

jonesMUFCforever

Buy a new carpet from John Lewis and sell the old on on Ebay.
That way everyone is happy.

I must say I find it odd the way you have been given a cheque payable to John Lewis though - I would assume that the normal procedure would be for them to issue a form of credit note rather than a cheque as this method of paying out must be open to abuse. How many cheques payable to John Lewis(or any other shop) have found their way down to the cash converters shops??

pufc_66

Not a bad idea, Ejones. The reason why the cheque is payable to John Lewis is that is who I specified the carpet was going to come from.From their point of view a cheque made payable to a company would be far better than sending out personal cheques I would have thought. Having never made a claim in 20 years, I wouldn't know what is usual or not!

easynotec3

The best thing to do would be to actually use the cheque to purchase the new carpet which was the reason it was issued. If you choose not to purchase a new carpet then u should return the cheque to your insurer and withdraw your claim. If the cheque is used for any other purpose and then the insurer asks to see the receipt for the new carpet then technically it could be classed as a fraudulent claim, ur policy could be cancelled and you would have to repay the money and also declare this on every insurance application u make making it very difficult to obtain cover in the future

pufc_66

easynotec3, I think on reflection you are right - return the cheque is the sensible and correct thing to do. I will also not be paying increased amounts by having lost my no claims. The last thing I want to do is defraud an insurance company!

easynotec3

pufc_66 wrote: »

easynotec3, I think on reflection you are right - return the cheque is the sensible and correct thing to do. I will also not be paying increased amounts by having lost my no claims. The last thing I want to do is defraud an insurance company!

I realise it must be tempting when u have this cheque and find out the carpet is going to be OK however insurance companies are not stupid and do check up on their claims. They could possibly contact you requesting a receipt or check with John Lewis if that cheque has been used for a carpet (assuming John Lewis have a system in place of recording cheque no's etc). Just trying to make you aware of what could happen if you, as many other people mite have done, decided to use the cheque not for the purpose intended

FlameCloud

easynotec3 wrote: »

The best thing to do would be to actually use the cheque to purchase the new carpet which was the reason it was issued. If you choose not to purchase a new carpet then u should return the cheque to your insurer and withdraw your claim. If the cheque is used for any other purpose and then the insurer asks to see the receipt for the new carpet then technically it could be classed as a fraudulent claim, ur policy could be cancelled and you would have to repay the money and also declare this on every insurance application u make making it very difficult to obtain cover in the future

It doesnt matter what the cheque is used for. As long as we have settled the claim for least amount we can get away with, the money is there for whatever the policy holder wants to do with. As an insurer, we really couldnt care less what you bought with the money (just as long as you dont try and claim for the same item again!)

Its even part of some negotiations- being given money for a damage allowance and living with it.

jessjess_2

And even if you sent the cheque back your premiums would still go up as you have made a claim. One would suggest to replace the carpet and be done with it.

pufc_66

Flamecloud seemed to be talking with knowledge of working in the insurance industry. I just phoned my company and asked did it matter what I spent the cheque on. She, like Flamecloud said, was not bothered at all and said we can spend it on what we want, they didn't care! This may help my decision, thanks for all your thoughts.