"Loss" without a claim

mutedcensor

My insurance company (who will remain nameless unless they don't change their position on this) have sent me a renewal quote with a loss itemised in the schedule even though I have not made a claim against the insurance company.
Basically I put a foot through the ceiling from the loft and I phoned the insurance company to understand the procedure should I need to make a claim. I ended up repairing the hole using a local tradesman and it only cost £100 so I didn't claim.
My insurance company are syaing that although I didn't claim it is seen as a loss and therefore it is on my record as a loss and my premiums have been affected as such.
Can they do this. I am SO irate by this I'm thinking of going to the ombudsman if they don't change "their policy".
One thing is for sure, regardless of what they do, I won't be renewing with them out of principle.
Thanks,
Rupert

raskazz

Yes, they can do this, and every other insurer does too. So if you find yourself not renewing your policy "out of principle" over this matter then you will unfortunately not find any other insurer you are happy with either.

You are obliged to inform any prospective insurer of all facts material to the risk, which (as you will no doubt be aware if you have recently obtained a quote) include all incidents of loss, damage or liability, whether claimed for through insurance or not. Even if you do not claim under your policy, a loss is a loss and therefore does alter the proposed risk, even if only marginally.

No point whatsoever in going to the Ombudsman as they will reject your complaint on this point. What the insurer has done is quite correct and in accordance with fundamental common law principles of insurance.

Oh, and also - if you are tempted to arrange insurance elsewhere without declaring the loss then you should think very carefully about what you are doing. Insurers share claim and loss information so if you put a claim in with a insurer that you did not disclose the loss to, they will almost certainly discover the non-disclosure, thus potentially totally invalidating your cover.

mutedcensor

Many thanks for your considered response.

I find this situation amazing. So in your view, if for example my child wrote on our walls with a felt tip pen and I wiped it clean rather than claim under my insurance, I should still, regardless of whether i contacted my insurer about this incident, declare this "loss" to any prospective insurer because it was an incident that is material to risk?

If this is the case, any sensitivities or compassion I had towards the insurance industry are completely lost as this is simply just a license to print money.

As an aside the insurer has attributed the loss value as £500 even though the job cost me £100 to sort out. Can they attribute any value they please to a loss. Obviously they never sent out a loss adjustor or anything like that so I find it strange that they can assign any cost they feel like.

I think my lesson here is never to phone the insurance company unless I am sure I am going to claim. Morally I am in the wrong but it seems to me that is the only way to proceed as they get you every other way.

*MF*

I wish I could say raskazz was wrong, but then again I wish I could not completely sympathise with your feelings, mutedcensor, and your example of the felt tip pen is spot on - it comes close to farce when I think of all the incidents I should have recorded in my life time - and I will not be alone in that by any means.

Anyways ... my main point in posting is that when you contact the Insurers to report a "potential" claim is that they will set up a record - AND - will record their "estimate" of the potential cost - that is where I guess the £500.00 comes from.

That is unlikely to have been changed, because you then went ahead with the repairs yourself - so (and hey - maybe you may can't be bothered - I could understand it if you weren't) - but that is the one item on your continuing record that to me can be corrected and should be corrected - the Insurer paid out £0.00 and that for me is what the record should show.


*EDIT* ... and just want to add it was in part the falsification of such "estimates" that lead to the collapse of Independent Insurance, and not too dissimilarly to the collapse of Equitable Life. Perhaps it is not just we common mortals that should abide by the law.