6 of us started renting a 6 bedroom house together in August 2007, and straight away took out contents insurance with Nationwide/Churchill. We paid £333 to cover the whole house (though it was in one person's name, but says in the agreement everyone in the house is covered, including visitors).

In November, a housemate had her bag stolen when out the house, and was able to claim this back on the contents insurance (it was only a small sum).

In March 2008, we were burgled, and another housemate had his laptop and i-pod stolen.

Nationwide refused to pay out. They were saying that the only person covered was the person who took out the insurance, though surely this is a bit strange that it cost over £333 for one person??

After 6 weeks of drawn out negotiations with Nationwide, they told us the following:- only 'family members' related to whoever had taken out the policy were covered, and Churchill had cancelled our insurance policy a while ago because there were multiple tenants living in the house, but they neglected to inform Nationwide, who therefore neglected to inform us. This meant that we were uninsured but totally unaware of it, having paid £333 and been given a policy that seemed to say we were covered. Nationwide have now said they'll give us a 'full refund' next week, seeing as 'the policy should never have been allowed'! Only thing is it's too late now we've been burgled and had valuable items stolen!

This seems very dodgy to me-- if we hadn't been burgled they would have just taken our £333 and neither mentioned that the policy 'wasn't allowed' nor refunded the £333, whereas if they'd told us a few months ago and refunded us then then we would have taken out individual insurance and my friend would not be without a laptop and an i-pod!

Please can anyone help or recommend what we do? Nationwide have been absolutely awful, unprofessional and basically they've tried to put themselves in a win-win situation. We would have ended up worse-off either way, either £333 out of pocket or without a laptop/i-pod. Has this happened to anyone else?

Any help would be greatly appreciated.

That sounds terrible, and from what you've said it does seem that the policy might have been mis-sold, as the person selling it should have told you that it wouldn't be suitable for you if you are house-sharing. However, if they don't cover house-sharers, I really can't understand why they paid the first claim in November. It seems strange that they've changed their mind about covering you, part way through the contract.

How did you take out the policy? Did you take it out over the phone, online or was it arranged in a Nationwide branch? If it was taken out over the phone, it could be a good idea to ask them to listen to the call, to prove what was agreed.

I've just remembered something from my CII course which could help you - insurers are "estopped" from asserting their right to avoid a contract for non-disclosure if they act in a way that indicates the policy remains in force. By paying the first claim (in November), they acted in a way which indicates the policy is in force. Therefore they can't legally deny the second claim, unless there is something specifically wrong with that claim.

I'd be interested to know how you get on with this.