Many people take out insurance policies to protect against risk.
Insurance gives us peace of mind that in the event of a calamity, we’re covered for financial loss.
But what happens when a company won’t pay out?
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The most common forms of insurance include motor, travel, pet, mobile phone and gadget, wedding, home contents and buildings insurance.
When something goes wrong, you need to make a claim either online or by telephoning your insurer.
They will often pass the claim to a claims handler who will want to see relevant evidence and receipts.
The company will then make a decision whether to cover or decline the claim.
Before submitting a claim, it’s worth looking at your policy document to make sure you’re covered and don’t fall foul of any exclusion clauses.
Typical exclusions include wear and tear, intentional or illegal damage, pre-existing or historic damage, loss that is the consequence of another event and acts of war, terrorism or nature.
Where a claim is declined unfairly, you can make a complaint to your insurer and ask them to reconsider their decision.
Perhaps they wrongly applied an exclusion clause or failed to consider technical evidence.
The company will have eight weeks to make its final decision, and thereafter you have a right to complain to the UK Financial Ombudsman Service (FOS) – which can be done online here: https://www.financial-ombudsman.org.uk
Earlier this year, the FOS published its analysis of almost 200,000 insurance complaints it handled over the last five years.
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The biggest issue was car and motorcycle insurance, which represented 32% of all general insurance complaints referred to the FOS. Next were the buildings insurance at 16%, followed by travel insurance complaints at 11%, home emergency insurance at 6% and home insurance at 4%.
I recently handled a building insurance complaint, which gives a good example of how to approach a complaint.
A communal downpipe serving two semi-detached houses had become blocked under the ground, leading to water seeping into the corners of the front rooms under the floorboards.
Dry rot ensued with the enclosed water ingress.
The remedies included replacing the damaged downpipe at a cost of around £2000 and dry rot treatment to each room, which included the removal of a third of the floorboards and a large section of plaster at a cost of around £4500 per householder.
The claims handler undertook a visual inspection and subsequently said: “Your insurer has advised the policy would not cover the rot as this has been something that has manifested over a period due to a long-term issue and not a direct effect from water damage from a one-off or recent event”.
Of course, there was no evidence for this assertion.
All of the expert evidence pointed to a more recent blocked drain pipe that hadn’t been visible because the blockage was underground.
The policy covered accidental damage from underground pipes and drains.
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Before making a complaint, visit the FOS website and search their past decisions.
Try and find a case similar to your own that was successful and make reference to that in your complaint.
There was a successful FOS decision on dry rot from water ingress and the homeowners were refunded over £11,000 on their initial complaint to the insurers.