Contents Insurance - Insurers now saying policy is void

[optimusprime2]

This is my first post and would be very grateful for any help anyone can provide.

 

Background

 

I took out a policy on 30/10/09 for Buildings & Contents Insurance after visiting a local Swinton branch. I was informed that the policy would cover up to £300,000 buildings cover and £40,000 contents cover. This policy was taken out after face-to-face consultation with one of their advisors. I was not told that there is a limit on valuables.

 

Incident

 

On 10/10/10, my property was broken into whilst I was away visiting family in another part of the UK. My television was stolen along with my son's PS3, my daughters Nintendo DS, games for their consoles, DVDs, BluRays and my wifes gold jewellery worth approximately £12k. The jewellery was stored in a locked briefcase which was stolen. Most of the gold jewellery was passed on through the family and was of great sentimental value.

 

Insurer

 

I duly reported the break-in to the police and my insurers. I was asked to provide details of the stolen items to loss adjusters with receipts and photographs of the missing jewellery. I sent the loss adjusters this information and was told a cheque would be sent to cover the value of the electrical items pending the outcome of the valuation of the jewellery. After numerous calls chasing updates, I was then told that the claim had been placed on hold because the amount of the jewellery claimed exceeded the valuables cover limit of £5k.

 

I have disputed this by telephone and been told that the insurer will be investigating this further. I am due to receive a response next week.

 

I am absolutely appalled by the level of service provided by both the broker and insurance company. I have spent hours chasing the response from the insurance company since the incident in October. I have to date not received one letter from the insurance company regarding the claim, nor have any of my calls been returned. I have also not received my original receipts, photographs or valuation of the jewellery from the loss adjuster.

 

Can the insurance company simply state that the policy is void? Why will the insurers not at least pay out for the electrical items and jewellery up to £5k??

 

Any assistance would be very much appreciated.

[unclebulgaria67]

Swinton should normally be avoided. They are part of a large french Insurers and are known for being very difficult if any dispute arises.

 

Suggest that you make a formal complaint to their Head Office in writing by recorded delivery.

 

The complaint is that the branch staff failed to properly deal with your demands on needs and did not cover the product information correctly. This is that they did not ask you for the value of the valuables that you had to make sure the policy was suitable. You have therefore faced difficulty with your claim and if this is not paid in full you will take this to the FOS or the courts.

 

You need to do a bit of reading to help you when you come to write your complaint. See ICOBS 5 & 6 in the following link. http://fsahandbook.info/FSA/html/handbook/ICOBS

 

Only you will know what information you went throught when you arranged the policy in branch. If you can't remember, it may be advisable to make a subject access request under Data Protection, as part of your complaint which will cost you £10. Ask them for ALL information that Swinton hold, including any branch files, any information held on Swintons systems, any information passed to Insurers underwriters, all details held on the current claims file and copies plus transcripts of all calls that have been recorded.

 

When you arranged in branch they needed to ask about valuables. First to make sure whether security terms were required and second to make sure the cover they were going to arrange met your requirements. This is key to your claim and continuation of Insurance, hence why you need to see what Swinton have on file. You can bet that Swinton will say you were asked about valuables and you did not advise them correctly.

 

If you were asked about valuables and did not disclose the value then that would be a different matter. You would then have to try to negotiate with Swinton and see where it goes, asking the FOS to arbitrate if need be.

[optimusprime2]

Thank you for that, will try writing to Head Office and advise of the outcome

[mrgruff]

Hello,

 

I agree with UncleBulgaria above. If Swinton have acted as your agent in arranging the policy, then they are responsible for ensuring you have the correct cover, and are liable for any loss you suffer as a result.

 

That aside, the policy itself cannot be voided for your valuables exceeding the amount claimed, if I have read that part right.

 

Misrepresentation of the value at risk can only lead to voidance of the policy if it is established that the applicant did it deliberately - usually to obtain a cheaper premium. Even then, there is case law on this point suggesting that the Insured elects to be his own Insurer for the remaining amount that isn't Insured - and receives a proportionally reduced settlement as a result, known as average. This is rare in consumer contracts, but still very common in commercial policies.

 

In a standard contents policy, which from what you've described this one appears to be, a valuables limit is NOT a sum Insured unless it refers to specified cover for a particular item (say, a very expensive watch or piece of art). The limit only affects what the policy defines as "valuables", and serves to limit the company's exposure to claims arising from easily portable and valuable items. The limit is effectively considered to be a part of the overall contents cover, so underinsurance would only come into consideration at all (let alone avoidance for it) if the TOTAL value of your contents exceeded the overall contents sum insured. This doesn't seem to be the case here.

 

The correct course of action is to pay the claim in it's entirety - where you are able to prove your loss with receipts/valuations etc - but limit the jewellery pay out to £5k, as you have suggested.

 

I would judge that you may be more likely to obtain payment of your claim by complaining about the claim decision in the first instance, though I note this is awaited.

 

If you need any help with what they come back with, feel free to post here and I will do my best to help.

[kamazad]

hi guys, i have a very similar situation where i was mis advised i am new to this site but it seems everyone is very helpful so i am seeking advise. The scenario is this in june 2010 i took out a policy for buildings and contents insurance with the AA who brokered it for NIG.

During the questions i was asked if i had any criminal convictions excluding driving offences. I asked what any driving offence unisured driving, driving while disqualified etc the adviser said yes no driving offences are included only criminal convictions. I replied yes i have criminal convictions but they are old nothing recent. The adviser asked me how old they were i said approx. 6-7 years old. She replied oh thats fine as long as you have no criminal convictions within the last 5 years. i worked it out in my head and i said to her no i definately do not have any criminal convictions within the last 5 years i definately have ones 7 years ago and i may have some just over 5 years ago but definately not within the last 5 years. She said thats fine they will insure me they only refuse insurance if convictions are within 5 years. So i took the policy. when i got my documents where it said if i had criminal convictions it said no so i rang the AA and told them i had and told the adviser this but it says no in the policy they said to me the adviser was right that as long as the convictions were not within 5 years i was fine and it just says no and not to worry about it. In october i had a break in and lots of things were stolen all my wifes wedding jewllery and things anyway i contacted the insurance company to make a claim. A loss adjuster from cunningham lindsey came who asked me similar questions to what was he asked about criminal convictions and again i told him that i was asked this when i took the policy out and i told them i had 7 years ago and what they advised. Anyway after waiting and waiting they got the police report saying the case was closed etc and now they wanted a subject access report to see my convictions i told them why did you not ask for this before as it is going to take ages and why do you need this as i disclosed all my convictions in the first place.Anyway i requested the report i also found out that only spent convictions are not valid so i checked my offences i also checked the rehabilation act and found out that convictions without custody are spent in 5 years but convictions that have less than 6 months custody take 7 years before they are spent. when i got the report i had two convictions just over 5 years that were a fine so they were spent but the one that i mentioned that was 7 years old was 5 days in custody this was on the 22nd july 03 and i took the insurance out on the 30 june 10 which means it was another 22 days before it was spent whats going to happen? AA said they are going to check recording but do they legally have to still have it can it mysteriously be lost or can they somehow invalidate my claim? they are trying everthing not to pay me what should i do. the worst thing is also that in december my front porch door got ripped off due to the wind and bad weather and i have claimed on my buildings insurance for that and my house is freezing but they havnt even come and temporarily repaired that either i am so sick of paying insurance but when it comes to claim they try any and everything not to pay!!! whats the point!!! can anyone help and advise me there is a lot more to this story so please anyone who knows anything contact me so i can tell you what else the insurance company has said and done to try and not pay me. Thanks

[unclebulgaria67]

Kamazad.

 

Can't really advise on this. It sounds like you know what you are doing. e.g. making the subject access request.

 

Only advice is to make sure you have a complaint logged with the claims department for both claims. The complaints can then be taken up with the financial ombudsman if necessary.

 

The person who sold you the policy was wrong. The AA needed to know about all convictions that were not spent and not those during the last 5 years.

 

Your claim could totally rely on the AA being able to find the telephone call on their systems and the content of the phone call. If they find the call and it matches what you have said, then they will have no option but to pay the claims. If they can't find the telephone call or it does not match what you have said, you may face an argument with them, which you might then have to ask the financial ombudsman to assist with.

[kamazad]

hi and thanks for the reply, i also bought home emergency cover and boiler cover from the AA at the same time the adviser told me that it was the same as the british gas homecare that i was about to renew and i asked if several things were covered with theres eg hot water etc he said it was and that there cover was cheaper so i went with them. i haad a problem with my hot water recently and when i phoned for assitance they told me that that was not covered so i made a complaint asking for my money back due to being missold the insurance in the first place they said they needed to listen to the call and contacted 2 days later and said i was right and they are refunding me the money. Im hoping being the AA they will not "LOSE" the recording cause i clarified everything with them. I know 100% she told me 5 years, the joke thing is that the lady from the complainst department who dealt with the boiler cover who listened to that recording was also aware of the theft claim and asked me what was the problem when i told her that the sales rep told me that they insured people as long as there was no conviction within 5 years she said that was right!!! she did not even know about spent convictions and how long it took before they wernt considered. can you believe that!!! and she was one of the people who deals with missold policies. When i corrected her she was very embarressed i hope i get someone like her to dezl with the claim. I must have spoken to about 10 people at the AA about this and only 2 have ever said that it depended on the sentence! now i received some more questions from the loss adjuster and they have no relevance or importance to the claim just simply ones to delay things and try tripping me up they are really trying my patience is there no one i can get to put pressure on them to deal with it quicker or am i simply at there mercy?

[optimusprime2]

Just a quick update

 

Wrote to Swinton Head Office and visited local branch. No response received to my letter and when visiting the local branch (which was a complete waste of time - was told the case handler was not in and the staff present could not work out the caseworker's notes...take from that what you will) was told I could receive a call back but not to my surprise, I've not heard anything.

 

Wrote letter of complaint to policy provider who still refuse to pay out on the policy. Have lodged an SAR and await their reply.

 

 

Hello,

 

I agree with UncleBulgaria above. If Swinton have acted as your agent in arranging the policy, then they are responsible for ensuring you have the correct cover, and are liable for any loss you suffer as a result.

 

That aside, the policy itself cannot be voided for your valuables exceeding the amount claimed, if I have read that part right.

 

Misrepresentation of the value at risk can only lead to voidance of the policy if it is established that the applicant did it deliberately - usually to obtain a cheaper premium. Even then, there is case law on this point suggesting that the Insured elects to be his own Insurer for the remaining amount that isn't Insured - and receives a proportionally reduced settlement as a result, known as average. This is rare in consumer contracts, but still very common in commercial policies.

 

In a standard contents policy, which from what you've described this one appears to be, a valuables limit is NOT a sum Insured unless it refers to specified cover for a particular item (say, a very expensive watch or piece of art). The limit only affects what the policy defines as "valuables", and serves to limit the company's exposure to claims arising from easily portable and valuable items. The limit is effectively considered to be a part of the overall contents cover, so underinsurance would only come into consideration at all (let alone avoidance for it) if the TOTAL value of your contents exceeded the overall contents sum insured. This doesn't seem to be the case here.

 

The correct course of action is to pay the claim in it's entirety - where you are able to prove your loss with receipts/valuations etc - but limit the jewellery pay out to £5k, as you have suggested.

 

I would judge that you may be more likely to obtain payment of your claim by complaining about the claim decision in the first instance, though I note this is awaited.

 

If you need any help with what they come back with, feel free to post here and I will do my best to help.

[optimusprime2]

Quick update

 

Have had no response from Swinton to my recorded delivery complaint letter - tracked this with Post Office and it definitely has been delivered to their offices. Policy provider has stated that their final response is that the policy is void. Have therefore prepared a complaint to FOS to investigate further.

[ihateyes]

Hope all gets sorted out.... and your happy with the outcome......

 

I can never stress enough why its important to read T&C's.... tbf to the advisors, they cant sit there und go through all the t&c's for us customers.... but under FSA thay have to give a balanced view ie the pro's and cons...

 

How many people, especially firt time buyers sit down and read their mortgage terms and conditions, their most important t&c's they will ever have in their life...

 

ANS: next to none, cos all we care about is getting the keys....

[optimusprime2]

So it's been a while due to FOS investigating my complaint - I've received a letter from FOS today with their final decision. Couldn't believe my eyes when i read "My final decision is that the complaint should be upheld"!

I now need to confirm to FOS whether I accept/reject their decision. I'm looking to accept - the Ombudsman has stated that they recommend RSA to pay out as per the policy £5,000 jewellery, contents, remove my name from the 'Claims and Underwriting Exchange's database' and pay 8% interest on the total payment from the date of the incident (01/10/2010) to the date of payment. Its taken almost 3 years to get to this decision and as a result my health has also suffered - I've had to pay over the odds for home insurance as I had to declare I had a previous claim refused. Is there any way I can be compensated for this??? Also the jewellery (gold) that was stolen was worth a certain amount when the indicent happened and if RSA pay out for this - it is worth more now due to the increased gold prices. Of course I understand that RSA may reject the FOS's decision and it may well be a continued lengthy process. If RSA payout would it be calculated at the time of the incident?? Has anyone had RSA pay out following an FOS investigation?? Thanks in advance!

[dacouc]

It sounds like the FOS are basically saying you should receive the standard policy cover for jewellery (Valuables) of £5k and also pay interest. As such any subsequent increase in Gold / Jewellery values is irrelevant as you're receiving £5k (Plus interest).

 

Congratulations by the way