Hi

Seeking advice how to deal with a very famous name (Spanish), who has recently declined our insurance renewal after 25 years' loyalty. Mortgage, investments (shares), bonds, 2 current accounts with said famous name associated with racing cars.

Sadly we had a water leak from the toilet cistern 3 years ago (£1,800) - we had water through the walls December 2008 (can't believe it cost over £1,000 just to have a surveyor tell us the upper wall needed repointing), and worst of all, the hot water pipe in the bathroom burst in March culminating in over £7,000 of claim with ceiling collapsing over room below.

Having said that we have paid our premiums loyally to said famous name for 25 years - only other claim being due to the hurricane in 1987??? We have never sought a better deal elsewhere.

This year they sent out a letter asking for details of my "other business" (10 hours' music teaching at home x 30 weeks per year) and declined renewal on account of visitors to the house per week (20 - under constant supervision). They have been aware of the facts since we moved here 14 years ago.

Our problem now is that nobody else wants to insure us due to the recent claims.

I am so, so angry. We have had 3 months of stress coping with the after-effects of a ceiling collapse (which caused my husband heart rhythm problems incidentally). He is due for surgery in 12 days' time.

It just really questions why you ever buy insurance? OK they paid up for the claim but now don't want to know us. It just makes a mockery of the system. Who the h... wants to cope with the upheaval we've had, let alone now with the selfish reasoning of some stupid underwriter who is protecting his own job by declining any insurance with any risk.

I can't believe how angry I am. I have spoken with a Customer Relations Clerk, who then spoke with the same Underwriter who reconfirmed the decision. I have asked for it in writing and details of who to complain to. We have 10 days to sort it out.............................. any suggestions please.

The "official" reason is that they estimate I have 80 people coming into the house per month and so therefore the insurance does not comply with home insurance rules..... not true 20 people per week x 30 weeks of the year. And variable.....

Any ideas please? Thanks

Hello and Welcome, simplelifelover.

I'll move your thread to the appropriate Forum, where hopefully you'll get some help.

Regards.

Scott.

Hello there and welcome to CAG. I'm very sorry to hear about the problems you're having. People here will help as much as they can, try to relax a bit. Maybe watch a spot of football .

One last option you have is to go to the fos later, if you still feel aggrieved, but that won't get you replacement cover. We have insurance experts who will be along, social life and football permitting, I'm sure.

How have you tried to obtain new insurance please? Comparison websites, insurance company websites, a broker.....

Is there an organisation for home music teachers that has links with insurance companies who understand how you work?

The claims part of this is not my field, but someone will know.

My best, HB

So far, I contacted my music organisation and was referred to a broker. Sadly nobody would touch us because of our recent claim. It is now the weekend so difficult to get anywhere but I have approach another broker who will see about quotes on Monday.

The thing is I have written evidence that this famous motor-car sponsoring firm has always known about my teaching.... it is on past renewal notices and they have always been happy to take our premiums for the past 25 years..... so it just stinks of an underwriter saying... hey, they've had trouble with water at this property.... whoa don't touch!

Come on, why do you buy insurance in the first instance???? Do they really want to just keep taking your money and then get rid of you at the first chance when you need some support from them????

The only other claim in 25 years was when the hurrican brought the garden fence down and that was 1987 I think!!!!!!!!!!!!!!!!!!!!!

Look forward to some suggestions.... thanks. But yes, there has to be an official complaint..... not the way to treat a very loyal customer with shares in them.............................

They are using the business from home usage, as a reason to decline renewal. Under the normal Insurance ways of conducting business, they would not decline renewal based on the claims, but they would instead apply terms/conditions, higher excess, plus higher premium to help reduce risk going forward. This is what the ABI would expect them to do, as a reasonal way of conducting business. To get around this, they have instead chosen to look at the business activity, saying that following review this is no longer compatible with their underwriting guidelines.

What you can do is ask Santander for exact risk reasons for declining renewal. What Insured risks are they particularly concerned with? If it is liability, then you can arrange separate Insurance for this.

Ask to speak to their Customer Relations Manager or Customer Services Director and probe them. Advise them they were aware of the music teaching before and they are using this as a smokescreen to decline cover, due to the claims. Advise that you will look to raise this with Tony Hetherington at the Daily Mail's Financial Mail. Financial Services companies hate it, if you involve newspapers, as people just remember bad news regarding a particular company and not how any complaint was resolved.

Thank you for your reply. I am following the advice given and will let you kow the outcome.

Well, they won't budge, (they say the underwiter's decision is final) they say 20 children per week x 30 weeks of the year (one at a time escorted from the front door) does not fit their insurance criteria and I should be looking for business insurance..... come on, piano teachers don't earn a fortune........................

Problem is we have just had this big claim due to the hot water pipe bursting so nobody wants to insure us.............................runs out Monday.

So you work all your life to be dumped like this?????????????

:x:x:x:x:x:x:x:x

I understand your frustration but I can also see where your insurers are coming from.

You have 20 potential little litigants coming in and out of your house each week. I can understand that you believe that they would come to no harm but all it takes is little Johnny to trip over a wire or bit of carpet that has come loose etc, and fall and break his arm. Then mummy and daddy instruct a solicitor and a claim lands on your doorstep and due to you (I presume and amongst other things) not have completed a Risk Assessment then you would be in breach of the Occupiers Liability Act 1957 and your common law duty to do the same and the Court would find you liable and then your insurers end up paying £1000's to lawyers and in damages.

As such, the risk to your insurers is certainly raised by you undertaking this work - not a huge risk for them but a risk all the same.

You would be amazed at how many people I talk to who believe they have no risk of attracting a claim and are gobsmacked when I tell them that actually they are in breach of 'X' regulations and they will be liable. Then they invariably say, but I have been driving/working/doing this for 20+ years and never had a claim....doesn't matter ....it only takes one moment of distraction or bad luck....

Have you actually tried to find some business insurance? Might not be that expensive to be honest especially if the risk is really low as in your situation.

Thanks for the reply.

As a member of ISM, I hold Public Liability Insurance. I believe they are not insuring because my brand new grand piano had to be moved out and put into storage in order for a dehumidifier to be placed in the room and they don't want to carry the risk again.

Have a quote via Lloyds at 25% above that quoted by our normal insurers purely due to our recent claim. I call that expensive.....

I understand your frustration but I can also see where your insurers are coming from.

 

You have 20 potential little litigants coming in and out of your house each week. I can understand that you believe that they would come to no harm but all it takes is little Johnny to trip over a wire or bit of carpet that has come loose etc, and fall and break his arm. Then mummy and daddy instruct a solicitor and a claim lands on your doorstep and due to you (I presume and amongst other things) not have completed a Risk Assessment then you would be in breach of the Occupiers Liability Act 1957 and your common law duty to do the same and the Court would find you liable and then your insurers end up paying £1000's to lawyers and in damages.

 

As such, the risk to your insurers is certainly raised by you undertaking this work - not a huge risk for them but a risk all the same.

 

Felt I had to respond to this thread again, and, in particular, these comments. As stated previously I hold ISM Public Liability Insurance so am covered separately for the above risk.

Secondly how many families with children have regular sleepovers/parties when kids are charging about wildly all over the house. Compare that with the solitary piano lesson when I collect 1 pupil from the door, take him/her to the piano for their supervised half hour lesson and take them back to the front door to be collected........................

There are other issues in this case - we were given 10 days' notice by phone of declination of cover, but only received written notification 1 day before expiry of house cover, so placing us in stressful circumstances.

They always knew about my piano teaching. Currently they say they would not insure at more than 5 students coming into the house; certainly had more than 5 when we first took out the policy 14 years ago and it always stated "part business" on the policy.... so the risk hasn't changed, but their goalposts have moved.

They moved their goalpost after they learnt there was no chance of recovering any money from any builder at fault re the burst pipe. They Emailed me a few before the letter re my teaching arrived and wanted to know if they could claim any money against any bathroom fitter. Bathroom was fitted by Dolphin Bathrooms 5 years ago (out of guarantee) and, yes, the fitter had squashed a flexible pipe behind the bath so when we had a new combi condensing boiler fitted by British Gas last autumn, it couldn't take the pressure.................................

The fact that they "declined" to renew the policy gave us unbelievable problems in seeking cover elsewhere, finally successful with a Lloyds underwiter (who specialise in insurance for ex-convicts!!!!!!) at nearly 40% hike in premium, which we will have to bear for the next 5 years.

We are so disgusted at this treatment of loyal customers, with substantial investments in this bank, we are following it up. So far we have been offered £75 compensation, which we have turned down as being ludicrous.

We are just normal, honest, hard-working people and do not deserve to be treated as criminals.

The only way you would resolve this is by embarassing them i.e. go to the press. The angle for the press article could be along the lines.... Insurers cancel cover due to financial crisis.

Just like any financial services company Insurers are having to identify ways to save money. One way is to look at individual policies to see it is economic to continue to offer cover. In the past the Insurers would probably have at renewal increased the premium, increased the excess and/or applied additional terms. Now it seems that Insurers are increasingly looking to decline to offer further cover and will if they can use other underwriting reasons to cancel cover on an uneconomic policy.

This is the type of situation that the newspaper financial services columnists love to receive, because it ticks all the boxes. It relates to the current economic situation, small business from home etc.

Secondly how many families with children have regular sleepovers/parties when kids are charging about wildly all over the house. Compare that with the solitary piano lesson when I collect 1 pupil from the door, take him/her to the piano for their supervised half hour lesson and take them back to the front door to be collected........................

Sleepovers etc are not a business. As you charge kid(s) for piano lessons then you are classed as a business and as such, the duties imposed on you are much higher than that of a simple houseowner.

On another point. Have you actually told your previous insurers that you have public liability insurance and as such they would not have to cover any aspect of your business? If not, this may well affect your premium.

Secondly how many families with children have regular sleepovers/parties when kids are charging about wildly all over the house. Compare that with the solitary piano lesson when I collect 1 pupil from the door, take him/her to the piano for their supervised half hour lesson and take them back to the front door to be collected........................

 

 

Sleepovers etc are not a business. As you charge kid(s) for piano lessons then you are classed as a business and as such, the duties imposed on you are much higher than that of a simple houseowner.

 

On another point. Have you actually told your previous insurers that you have public liability insurance and as such they would not have to cover any aspect of your business? If not, this may well affect your premium.

Yes, they know................and have known for the last 14 years - they have always been happy to collect the premiums up until now!

The only way you would resolve this is by embarassing them i.e. go to the press. The angle for the press article could be along the lines.... Insurers cancel cover due to financial crisis.

 

Just like any financial services company Insurers are having to identify ways to save money. One way is to look at individual policies to see it is economic to continue to offer cover. In the past the Insurers would probably have at renewal increased the premium, increased the excess and/or applied additional terms. Now it seems that Insurers are increasingly looking to decline to offer further cover and will if they can use other underwriting reasons to cancel cover on an uneconomic policy.

 

This is the type of situation that the newspaper financial services columnists love to receive, because it ticks all the boxes. It relates to the current economic situation, small business from home etc.

Thanks, it is with the press, and we plan to move our investments. Whilst they may be able to satisfy themselves that the decision falls within the underwriting guidelines (although the goalposts have been moved), it appears morally wrong. Also a cause for concern for all instrumental teachers throughout the country if this is the way they behave after a big claim......

PS: If they are saying you need business insurance (over £1000) even if you only have 5 pupils per week = £75 x 30 weeks of the year = £2,250 gross income, then I think there will soon be a shortage of instrumental teachers.....and a lot of uninsured properties..........

Hi simplelifelover,

I understand that you are angry at the recent events, and that it can seem unfair. However there are a few points that you have raised which show a lack of understanding about how the insurance industry works. As operational staff (and even many underwriters) can be poor in explaining the reasoning, I'd like to clarify a few of your misconceptions. This will hopefully allow you to understand what is going on a bit better and make an informed choice about what you want to do.

Thanks, it is with the press, and we plan to move our investments.

Firstly think carefully before you go to the effort of moving investments. You do not have insurance with Santander - like most big banks they act as a broker for another insurance company (and take a commission from it). The underwriting acceptance rules and the underwriter you spoke to (if you do get your insurance through Santander) will be Equity Red Star. Santander will have no decision making or authority in this matter. Not saying that you shouldn't move if you really are that upset with Santander, just saying that this decision has very little to do with their company other than their decision to use Equity Red Star as their underwriting company.

It just really questions why you ever buy insurance? OK they paid up for the claim but now don't want to know us. It just makes a mockery of the system.

I think it's pretty clear why you have bought insurance - and the fact is that by purchasing insurance you have been saved from £8,800 of repairs in the last 3 years. Insurance is not worked out as a pot of money that you pay into and then claim from at a point in the future. It is based on the individual risk of something occurring each year - ie it is predictive and not historic. Think of it as gambling in reverse, because that is absolutely what it is.

Now the reason why premiums rise (or insurance is declined or terms are imposed) after a claim is made is because past claims are a good indicator of future performance. You are not being punished for a past claim (that would be silly as another insurance company that didn't have to pay your old claim out would undercut the insurer trying to punish you and steal the business), you are being assessed as being a higher risk because the trend is that people who have recently claimed will claim again. Just like everything else you are rated on for insurance (your age, gender, occupation, car you drive or number of bedrooms in your house), it is based on statistics of the performance of people similar to yourselves.

Additionally £8,800 / 14 years of payments means that if your insurance premium average over that time was less than £628 you're still ahead (i.e. the amount of premium you have paid is less than the repair bills you would have paid).

Have a quote via Lloyds at 25% above that quoted by our normal insurers purely due to our recent claim. I call that expensive.....

With a recent claim and the loss of your Years Claims Free, a 25% premium increase is actually not that bad an increase. 3 year's no claims discounts would probably be around 35%-40% in itself, with the claim probably adding 10%-20%. I know you are angry at Santander for declining to invite you for renewal, but don't let your anger cloud your judgement. You knew your insurance would go up after making a claim.

Now that all said - I do think you have a valid point regarding your home business use. The rule of thumb for insurance companies is that when deciding to accept business you are not allowed to decline existing business when the material facts have not changed. And these material facts must be relevant to the reason for the decline.

So for example if you moved house to an area with a high chance of flood your insurer would be entitled not to offer a renewal because of the risk of flood. That's decline reason (flood risk area) is relevant to the materal fact change (moved house).

Discontinuing cover based on something that they had previously had no trouble covering isn't necessarily against the rules, but it's on damned shaky ground - especially when you have recently had a claim and it's looking likely they are trying to shed the business. This is something that I believe you do have a case for with the FOS.

The first step is to make an official complaint (if you have not done so). It may be hard but don't write something like you have in your OP here. Keep it very factually based and to the point. So state that you are complaining because you are being declined for cover due to a reason that was previously acceptable, and that your circumstances regarding this has not changed, and you want to know the reasons for it. Once they provide a reason complain about this demanding that you be accepted, and after they say no reply asking them if this is their final offer.

At this point you can go to the FOS to complain. However be wary - this whole process could take a long time, and the FOS can only rule on acceptance and not on price. You may find that after all of this you are accepted, but that the premium will be higher than the quote you have received from Lloyds. It does sound like they are taking the ****, and I'm the sort that would probably fight for the sake of it - but be warned that you could be wasting a lot of your own time for no gain at all.

Oh and try not to be incensed that your broker mainly deals with ex-convicts. These sort of specialised brokers are just generally very good at finding insurance products that have different underwriting rules (be it criminal convictions, high risk areas, unusual circumstances, previous claims etc).

Good luck, and let us know how you get on.

Thank you so much for that full and informative reply. Sometimes I feel I need to go to college just to understand the business world these days!

We have had 3 years of a lot of trauma, including work from a bad builder and, as a result, lost a lot of money... on top of this bereavement, illness. The ceiling falling in was just the last straw! And then to be declined on renewal, even more money had to be found to avoid the interest the new insurers wanted to put on direct debit payments.

I do have schedules which clearly state "music teacher" and "part business" for the last 14 years, and I definitely had more than 5 pupils when they commenced.

I do feel we were given a lot of extra stress on top of the stress we had in coping with the ceiling disaster, and I suspect this is what is bugging me as well as the unfairness of the decision, when nothing has changed. That also concerns me for other music teachers.

We will think carefully and will let you know what happens. THANK YOU!

Can the FOS rule on acceptance other than Subsidence or Flooding? I'd assume only if there was an issue of voidance this could happen?

Secondly how many families with children have regular sleepovers/parties when kids are charging about wildly all over the house. Compare that with the solitary piano lesson when I collect 1 pupil from the door, take him/her to the piano for their supervised half hour lesson and take them back to the front door to be collected.........................

First of all, dealing with the above quote there is a major difference. You are being paid for your work. Having kids around for a sleepover, there is no payment.

so the risk hasn't changed, but their goalposts have moved.

They are entitled to do this. The insurance premium is for a year. At the end of the term they can offer you new business on completely different terms

They moved their goalpost after they learnt there was no chance of recovering any money from any builder at fault re the burst pipe.

It is more likely that the loss adjuster has compiled a report including a referral to Underwriters regarding the business use of the policy.

We are so disgusted at this treatment of loyal customers, with substantial investments in this bank, we are following it up. So far we have been offered £75 compensation, which we have turned down as being ludicrous.

Who are you complaining to? Santander, like most banks do not insure themselves, but, as below, ERS deal with the policies. It you have been complaining to "Santander" at the address on the documents you might have more luck complaining to the Secretariats office of Santander... in Milton Keynes if my memory serves me right. This is the complaints section of the banking arm, they will ask ERS for their comments, but come to a decision thats best "for the Santander brand".

Finally, when I worked with when what was Abbey 9 years ago, and until recently it was underwritten by Norwich Union. As the uw have now changed there is a bigger chance of a change of policy procedure.

Good Luck

Can the FOS rule on acceptance other than Subsidence or Flooding? I'd assume only if there was an issue of voidance this could happen?

They can but it' a lot murkier. The technical rules for Flood is that an insurer is not allowed to decline for an event that is less frequent than 1 in 75 years if the area has been reinforced for flood, or plans / work have been put in place to improve it in the next 5 years.

In practice what tends to happen is that an insurer will not decline any business that was previously acceptable if the risk hasn't changed. You have to have a very good reason to do that. In fact I've recently been working on changing our flood decline areas, and we decided that any existing customer that is in our new decline area would not be declined.

Typically an insurer may be able to get away with this if another insurer will pick it up. In broker based business you may not even see it as the broker will place you elsewhere. And if you cannot get cover anywhere else, well then the incumbent insurer will be hard pressed to not provide you cover.

Like I said above - worth a fight if you are put in a right mess, but the alternate quote you have (given the extra claim) I think is pretty good and personally would just give them my business instead.

Hi simplelifelover,

 

 

 

 

 

Now that all said - I do think you have a valid point regarding your home business use. The rule of thumb for insurance companies is that when deciding to accept business you are not allowed to decline existing business when the material facts have not changed. And these material facts must be relevant to the reason for the decline.

 

So for example if you moved house to an area with a high chance of flood your insurer would be entitled not to offer a renewal because of the risk of flood. That's decline reason (flood risk area) is relevant to the materal fact change (moved house).

 

Discontinuing cover based on something that they had previously had no trouble covering isn't necessarily against the rules, but it's on damned shaky ground - especially when you have recently had a claim and it's looking likely they are trying to shed the business. This is something that I believe you do have a case for with the FOS.

 

 

 

Good luck, and let us know how you get on.

I'm updating to let you know how I've got on! I seem to have opened a can of worms, as music teachers nationwide are finding they are being priced out of business by insurers. Watch this space............ the stories in my professional music association journal have been horrendous. One person complaned that he had received insurance on the condition that the room where the lessons are held is specifically excluded from the policy!!!!!! His comment "What do they think I do in there?" .... and another comment from another teacher "I too had problems getting home insurance as a private music teacher. After I suffered a break-in through my newly installed and locked "high security" windows, my insurance company made a huge increase in my premium. So I started to shop around for an alternative provider. No insurance company would take me on unless I declared myself to be a music school, which would incur a much higher premium. As I am retired, I normally have only about 7 or 8 well-behaved individual violin pupils per week in my study at home, sometimes with parents in attendance. This is in no way comparable to a large institution with hundreds of people wandering around the establishment. I too discovered that even insurance brokers were unable to help me. It makes one wonder how many private teachers are not properly insured, or how many insurance companies could benefit from catering for these respectable potential customers at a reasonable cost" ?????????? :sad:

We have gone to the FOS, much as we didn't have the time to follow it through, but felt morally obliged to do so. The rise in premium is actually much higher than I quoted originally, it is about £400 higher, representing a 60% increase in premium, and representing about 10% of my husband's pension. Due to the claim, we are likely to be lumbered with this for some years.

FOS now say the claim was set up wrongly and needs to be addressed against A...a as S........ was the broker. 6 weeks ago they gave them 8 weeks to reply. We have had no answer. We have requested for them to reinsure us at a competitive premium.

Now I'm forgetting about it as Christmas is nearly here.

Good to have the FOS involved. I think you're doing the right thing by forgetting about it for a couple of weeks, enjoying the festive time, and then seeing what they say in the new year. Let us know what the reply is if you need any further help!