After a flood event we have agreed a cost for items damaged with our loss adjustor. He is, however, telling us that in order to release the funds, he requires to see proof that we have ordered replacement items.

Maybe I am way wrong here, but on our only other previous claim (different loss adjustor) we agreed the cost of items damaged and received the funds to spend as we pleased.

Is he entitled to demand proof of ordering of new items before paying out ?

Although it is not our intention, would we not be entitled to the insured value of replacement (which he has already agreed to) - and if we want to blow it in a casino then that would be our business !!!!!! ?

No. He is not entitled to insist on that. It is up to you what you do with the money.

It is merely up to you to agree the value with them and then they are obliged to pay out.

I have heard some stories of insurers insisting that goods be purchased from a particular supplier - because they get a discount which isn't passed on to the client

Cheers, I thought it was a bit strange to be asked to show proof of purchasing new items in order to get the pay out. He is, incidentally, not asking for any specific supplier - any will do. In all other respects he has been extremely pleasant and helpful.

Any idea why he would be placing this condition on us, and how should I respond to his condition ? i.e - can I quote something to him that validates my argument for payment without the need to show proof of pre-ordering the goods ?

He actually was as specific as saying that it was just the proof of an order that he required - so even if we just stuck down £50 deposit to get the paperwork for him, we could then just cancel the order ! We were willing to play ball, but we are talking about £2k worth of carpets and everyone wants 20% so it would hit us for £400 off of our claim.

Normally once the value of a claim has been agreed, you then agree how you want it settled. The loss adjuster obviously is concerned that you appear to have intentions to use the money, for purposes other than to replace the damaged items. You would have to think about how you have given them that impression. It is not unusual for claims involving building works to expect the works to have been contracted to a builder before the claim settlement is made, but for carpets it would seem a bit OTT.

If you do your own research on the FOS site, I am sure you will find info/cases that will assist you. To get you started, here is a link.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/92/92-insurance-claims.html

Ok, food for thought. I won't email him today - will wait to see any more advice here. I certainly don't want to go back all guns blazing, demanding the money - only to be hit with a clause/small print etc that says they CAN actually demand to see proof of ordering the new goods before releasing the funds.

Ok, food for thought. I won't email him today - will wait to see any more advice here. I certainly don't want to go back all guns blazing, demanding the money - only to be hit with a clause/small print etc that says they CAN actually demand to see proof of ordering the new goods before releasing the funds.

What are you waiting for a black and white reply to back your case for a straightforward cash settlement. If you want a cash settlement, just ask the loss adjuster. They will deduct a relevant percentage from the claim to reflect the discount they could have obtained from the supplier of replacement goods. If you check the FOS link, this confirms the position. These matters are not written into Insurance policies or rule books, but are matters of custom that often have FOS rulings which confirm how Insurers should act.

No. He is not entitled to insist on that. It is up to you what you do with the money.

It is merely up to you to agree the value with them and then they are obliged to pay out.

 

I have heard some stories of insurers insisting that goods be purchased from a particular supplier - because they get a discount which isn't passed on to the client

Yes that happened to me. I had a shed burglary and several thousand pounds worth of fishing tackle stolen. The loss adjuster offered me £2500 if I agreed to use a particular shop to re-buy the goods, or a cheque for £2250 to go anywhere I wished. When I asked for an explanation regarding the difference, he was quite open in saying that the insurance company gets a 10% discount for using a particular shop.

regarding the OP, they don't trust you, you talk about a previous claim and not spending that on what you claimed for, whilst there is nothing wrong with that as it is your entitlement to do that, you have said the wrong words raising their suspicions .

It's usually written in the "how we will settle your claim" section of a policy wording, very standard, the insurer will somehow mention that they will choose to repair or replace, by stating that point, if they choose to replace, your choosing a cash settlement instead of taking the replacement means you can only claim what they would have paid. If they didn't offer a replacement in the first place, then they have to pay you the market value.

Insurers get the discount, keeping claim costs down and eventually premiums.