This article is about how insurance companies often make odd decisions. Here’s an example of how one insurance company refused to pay a claim that another department had already agreed to pay, the delays it causes, and what you can do about it.

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We’re paying. No we’re not!

Terry calls me and lets me know there’s been a flood from an appliance installed at their property. It’s obvious that this is covered by the insurance because this is one of the main risks that we were asked to reduce. It was a contractor that caused the problem and eventually they will be paying for it, yet when there’s water all over your property floor and the contractor has failed to answer their phone, things can get stressful. I let Terry know that we would ensure that someone visited to assess the damage, but the main thing was to stop the leak and find out what caused it.

How can they possibly refuse?

Once the claim was made the insurance company confirmed that it would repair the internal damage yet none of the damage to the walls. Yes the wall, this was some leak! This was some leak and it is not unusual for this to happen when a property is unattended. We helped the client make contact with the insurance company of the walls, and things seemed to be progressing smoothly, with all the various parties agreeing the damage was covered and the amount to be paid to the insured to replace all of the damaged property, repair the flooring, the walls, et al.

It then transpired that the same insurance company covered both the internal and the structure. However one department had agreed that it was fair to pay for alternative accommodation whilst the repairs were undertaken and the other department said it would not be necessary. This caused a delay, there was no need for it, because you can’t renege on a promise, and as insurance contracts are promises, we weren’t going to let them get away with it.

What can you do about?

This often occurs and the two insurance departments appointed 5 separate “independent” advisors to manage the damage. We oversaw all the relevant parties and it was a shame that one of them was seeking to “draw favouritism” from the insurance company by trying to reduce the claim. Terry was pleased with the final settlement, but it was only achievable because one of the adjusters appointed by the insurer was reasonable and went the extra mile once we had put together a fully reasoned argument as to why the settlement should be full and include the cost of alternative accommodation.

As I write this, Terry is preparing for her stay in a hotel and all the building work is due to be completed within a fortnight. It’s a shame that a hotel is even necessary and the lesson is, make sure you use contractors and suppliers who are there to help you when you most need it. A good way to check this is to ring the claims line of any insurance provider that you are due to choose. I have said this before – at least it will give you the opportunity to assess how quickly they will respond to your claim. It may help you measure whether they have put all of their resources into sales and leave you hanging when you most need them.

Wrap Up: There are always difficulties when different policies cover parts of the same property. Who covers the floor if it is someone else’s ceiling? The measure of any service is how well they perform when you need them. If you can, try and use as few advisors as possible when protecting your assets, income or reputation. This will reduce the number of gaps and the time it takes to deal with any queries when accidents happen.

Top Tip

If you are having any form of work done at your business or home check the insurance details of the proposed contractors. The fact they have insurance is a good start, yet not all “cover notes” are the same and the policy details behind them are even more complicated.