Asked to pay excess in ADVANCE of claim - how come???

[Mary Martha]

My son showed me a letter where he has been asked to pay his Norwich Union policy excess of 100 pounds before his home insurance claim can be dealt with. Does anyone know if this is standard practice with insurance claims? It's not what I am used to because when I made a claim myself the excess was deducted from the amount I received as settlement. I am suspicious and would like to check it out with more experienced people. It seems risky for my son - what if the claim is rejected or the amount of the loss is fixed at less than the 100 pounds which he is being asked to pay?

More details: the claim is for a burglary, and the letter is from iVal, who say they have been asked by the insurance company to administer the settlement of the claim.

Thanks!

	Household Insurance Click link to open in new window.

[saintly_1]

I would be tempted to contact Norwich Union to ask if this is standard practice

[Mary Martha]

thank you, Saintly! I have searched the Norwich Union website for information and all I can find is the following from the FAQ's:

9. Do I receive a cheque after a claim?
Some people prefer to receive a cheque for their loss but this is becoming increasingly infrequent. Most contents insurance companies will replace items for you as they can bulk-buy. This reduces the cost of claims and ultimately helps keep premiums lower.
Home Insurance, Building Insurance, Contents Insurance | FAQ's from Norwich Union

I also went to the iVal website iVal - Under Construction and there is no information there because it is under construction, but there was a link to this page Visa Options
This means claims are not paid by cheque but by a plastic card. So what would happen if my son paid over the 100 pounds that he is being asked for, is that IF the claim were accepted and IF the amount agreed to be paid were over 100 pounds, the money that my son paid in cash would be returned to him in the form of a plastic card which he could only use at iVal's approved merchants.

At best it seems that this is not good financial practice and at worst, the policy holder may lose the money he hands over.

What interests me is whether this is standard practice amongst other insurers besides Norwich Union.

	Household Insurance Click link to open in new window.

[beccus]

Mary Martha
I'll find out for you and get back asap, although it does ring a bell.

Becca

[beccus]

Hi
It is usual practise amongst Insurance companies to ask the customer to pay the excess up front on this type of claim. As your son is dealing with our supplier I-Val directly they will settle the difference with Norwich Union. If for example your son replaced the item himself and sent us the receipt we would issue a settlement figure and deduct the excess. You will be able to find more information in the policy documents regarding excess payments. I'd like to reassure you that I-Val are not trying to scam you, they are our approved suppliers.
Becca

[pubno1]

I know this post dates back a bit now, but I thought I'd comment on the letter you received from iVal.

Unless the wording of their letters has changed - the letter states the excess amount(s) and indicates taht they will ask you to settle this directly with them during the course of the claim (usually after replacement items/vouchers are agreed - but before anything is issued).

iVal - Options is a Visa styled gift/voucher card - its unlikely you would receive a payout via this method.

iVal attempt to repalce goods directly, or provide you with vouchers to do so. They can not deduct the excess from the settlement figures without NU's authority and intervention. (How do you deduct £'x' from a physical product anyway?).

Either way, since you never posted again on this thread I'll assume everything worked out in the end..

[daviet1976]

Just want to add that 99.9% of insurance claim are dealt with in this way.

If you get a replacement TV for instance, at what point would you expect to pay your excess?

Very few claims are settled by cash these days, given money laundering and fraud concerns (although cash settlements are a very effective method of saving money!)


Think about what happens with car insurance. When do you pay your excess to the repairer? Before or after the repairs?

Legally everyone has an element of self-insurance written into their policies. This is the excess. By paying the excess you, in effect, seal the contract of the claim being accepted and allow the insurer to proceed further.

This is why we were always told to be very careful in requesting an excess if we thought the claim was in anyway fraudulent, as we could not give an insured the impression that the claim was "accepted".

	Car Insurance

[Bernie_the_Bolt]

Originally Posted by daviet1976

Just want to add that 99.9% of insurance claim are dealt with in this way.

Do you have data to support this? I feel it may be an overstatement. I have never paid the excess before my claim could be dealt with.

Originally Posted by daviet1976

If you get a replacement TV for instance, at what point would you expect to pay your excess?

When I collected the TV or when it was delivered.

Originally Posted by daviet1976

Very few claims are settled by cash these days, given money laundering and fraud concerns (although cash settlements are a very effective method of saving money!)


Think about what happens with car insurance. When do you pay your excess to the repairer? Before or after the repairs?

After.

Originally Posted by daviet1976

Legally everyone has an element of self-insurance written into their policies. This is the excess.

Apart from excluded perils required as a matter of public policy, there is no legal requirement for any self-insurance. The biggest component of self-insurance is not the excess but the excluded perils and any loss that exceeds the limit of indemnity of the policy.

Originally Posted by daviet1976

By paying the excess you, in effect, seal the contract of the claim being accepted and allow the insurer to proceed further.

This is why we were always told to be very careful in requesting an excess if we thought the claim was in anyway fraudulent, as we could not give an insured the impression that the claim was "accepted".

And further, it puts insurers on the back foot if they later wish to deny or restrict the claim in any way.

[daviet1976]

Apologies.

99.9% of the claims I personally settled were handled this way- both household and motor. Simply for efficiency.

[quote=Bernie_the_Bolt;170 8677]Apart from excluded perils required as a matter of public policy, there is no legal requirement for any self-insurance. The biggest component of self-insurance is not the excess but the excluded perils and any loss that exceeds the limit of indemnity of the quote]

I agree Bernie. But for the "Man on the Clapham Bus" my point still stands!

NUI policy is to collect the xs as early as possible in the claim. Suppliers will ask for the excess before the elivery of good. Repairers will ask for the xs before the car is collected from the Insured.

[Bernie_the_Bolt]

[quote=daviet1976;1709481]Apologies.

99.9% of the claims I personally settled were handled this way- both household and motor. Simply for efficiency.

Originally Posted by Bernie_the_Bolt

Apart from excluded perils required as a matter of public policy, there is no legal requirement for any self-insurance. The biggest component of self-insurance is not the excess but the excluded perils and any loss that exceeds the limit of indemnity of the quote]

I agree Bernie. But for the "Man on the Clapham Bus" my point still stands!

NUI policy is to collect the xs as early as possible in the claim. Suppliers will ask for the excess before the elivery of good. Repairers will ask for the xs before the car is collected from the Insured.

But notably not before the claim is admitted and a settlement figure agreed upon. That is what the OP has been asked to do.

[daviet1976]

Sounds as if the claim has been accepted already and the details passed to iVal for settlement.

It's unlikely the OP will have any contact with a NUI office now (unless there is a problem.

All I'm saying is that it is normal practice for NUI to request payment of the excess before your recieve yours goods or your car repaired.