Quick insurance settlement question.

[themilkman23]

Had an unfortunate accident with my TV to which I had to make a claim through Norwich Union.

Everyone I spoke to was very helpful and advised that Comet would come out to have a look at it. I advised NU that I wasn't happy with as I have had bad experiences with Comet in the past and could they send someone else? I was told they didn't have anyone else but I could get my own engineer to give a report, which I did and it said that it was beyond economical repair. Now due to this I, mistakenly, went and bought another TV on this basis.

I've heard from NU who have advised that they have accepted the claim and can offer me £749.99 in vouchers or £515 in cash settlement. Because of the above I have no need for the vouchers as I have the cost of the new TV sat on my credit card.

So my question is if I do want a cash settlement am I stuck with the much lower amount or is there a way they can up it to the amount the engineer quoted for a replacement which is £693.74? I know I probably made a mistake in replacing the TV, but I was getting it in the ear from all quarters as it's our main TV and the only one with Sky plumbed in.

Thanks in advance for any help.

[LemonTwist]

I hate to say this, but I think you were right when you said you have probably made a mistake by replacing the TV yourself.

The reason why the cash payment is lower than the value of the vouchers is because insurance companies receive a discount when settling claims via their preferred suppliers.

In the policy booklet it says the following under the Settling Claims clause:

We choose to settle a claim by either
repairing or replacing property, or by
making a payment.
If we can replace property, any payment
will be limited to the cost of replacement
by our preferred supplier.

What I suggest you do is phone the claims department and tell them about your situation and they might be able to work something out for you, particularly if you have been a customer for a long time. It is at their discretion what to do, but I think it is worth asking.

[themilkman23]

Cheers for the reply and the advice, I've been with them for the last two years now.

Dammit, I knew I had made a mistake. Oh well, I suppose I'll have to take the hit financially unless they are extremly understanding when I speak to them. At least my other half is happy. Money isn't that important is it

[Bernie_the_Bolt]

Is £749.99 the cost of the replacement for the TV from their preferred supplier? If so then you are entitled to the lesser of £749.99 or the amount you paid. If you paid more, you could argue (for the reasons below) that they should pay the full amount you paid - but settle for the £749.99.
I think NU have confused themselves with what they should be offering if you did not replace the TV.

We choose to settle a claim by either
repairing or replacing property, or by
making a payment.
If we can replace property, any payment
will be limited to the cost of replacement
by our preferred supplier.

If the above is also the correct clause it is also ambiguous. It says they will do one of three things. Repair, replace or make payment. They haven't repaired they haven't replaced (and that is where the discount comes in) they are making a payment. The fact that the payment is in either vouchers or cash is nevertheless a payment.
What the NU meant to say was as follows:

We choose to settle a claim by either
repairing or replacing property, or by
making a payment.
If we cannot repair or replace property, any payment
will be limited to the cost to us of replacement with the nearest equivalent
by our preferred supplier.

There are in fact no restrictions under NUs clause if they make a payment.
But they didn't and hence the clause is ambiguous. Under the contra proferentum rule of policy interpretation, any ambiguity has to be construed against the drafter.

[LemonTwist]

Bernie the Bolt, I think what the clause means is that if it is possible for NU to replace the item via one of their preferred suppliers, but the customer requests a cash payment instead, then that cash payment will be limited to whatever it would have cost to replace the item via a preferred supplier. That is how I interpret it anyway.

[Bernie_the_Bolt]

LT, The fact that you, as a reasonable person, read it that way demonstrates its ambiguity.

I am also a reasonable person and read it that NU chose to settle claims in one of three ways to the exclusion of all others. IE they chose not to settle claims by offering alternative,different goods or services to an equivalent value or any other mechanism.

They do not specify any preference or priority for the three possible methods of settlement and they certainly do not say that the customer cannot chose their prefered method.

In any event, they haven't repaired or replaced they are offering payment and they need to be asked to explain and justify why they are restricting it.

[themilkman23]

OK, thanks for your help all. I've emailed Beccus from here to see if there is anything they can do and I'm also seeing if anyone wants to take the vouchers off me.

I would say I'd learn from this, but hopefully I won't have to make another claim.

[themilkman23]

Oh well, all worked out in the end.

Phoned them up and explained the situation and the guy was very understanding and agreed to settle the claim at the amount my engineer could get a TV for with his discount.

Very, VERY happy with NU and would not have any problem with renewing with them.

[Bernie_the_Bolt]

Great news! well done!

[daviet1976]

Well done milkman! Good Work!

However, I should just note that FOS have sided with Insurance companies on this wording in the past.

However, the handler who called to make the offer based on the policy wording quoted above was incorrect.

NUI could never have replaced your TV as you had no intention of going to their preferred supplier. Besides, were they replacing like-for like? I doubt it.

When they told you to get a report, they should have quoted you the policywording at that point, so you knew exactly where you stood with regards to replacement.

PS ex NUI for a decade.

	The Financial Ombudsman Service For the most part, don't bother. The Ombudsman is an industry arranged service which is under-resourced, takes too long, lacks clear transparency. You have no idea what evidence the FOS has received from the bank or how your complain has really been handled. The FOS is the preferred complaints route for the banking industry. The county court is to be preferred by consumers for its speed, openness, the quality of its awards and also because it will award 8% interest on top of any damages won by you. The Ombudsman should normally be used to solving little technical difficulties or customer service problems which you have expereinced with your bank.