Broker replaced legal insurace inferior policy leaving me uncovered. What are my rights?

[cagadoo]

My insurance broker who I had home cover with legal expenses add on has renewed me with a new insurer.

 

I have a potential legal problem which began during the old policy and was covered by the old policy.

However, nothing happened resulting in a strong cause of action to make a claim under the old policy.

 

The new policy has an exclusion for the peril that was covered by the old policy.

 

If the dispute leads to a claim now, the new insurance will not cover it.

 

If I try to get a new policy covering the type of problem I might have, it will exclude things that began before the policy and will not cover new claims for at least 3 months from the start of the policy.

 

Basically, i've been robbed of my cover.  What can I do to get cover in case the problem turns into a claim?

 

What are my rights?

[BankFodder]

Who is the broker? Are you friends with them and you want to stay friends?

Also, why did the broker do this?

[unclebulgaria67]

Read the terms of the old legal cover.  Does it not still cover legal issues, that arose when the policy was in force, subject to a time period ? 

 

And please note that most legal expenses policies require you to notify the Insurers within a certain period of the legal issue arising.   Failure to notify the Insurers of the legal issue within the  time limit noted in  the policy terms and conditions , would result in you not being able to claim.  This is because the Insurers would want to examine the legal issues and see whether they were able to resolve them, before there was any deterioration, which could lead to a greater exposure to costs.

 

Ask your brokers to find out for you, if you are not sure.

 

Brokers will often switch Insurers when policies are due for renewal, so their customers receive the best option available.  Had they known about a legal expenses claim and any potential loss of cover, they may have left you with the same Insurers, if the brokers still dealt with that Insurers.   Brokers can lose arrangements they have with certain Insurance underwriters and they then switch to an Insurers they can still use.

 

And the renewal documents issued will have noted the change of Insurers, so the policyholder would have had opportunity to reject the renewal offer and ask the brokers to stay with the previous Insurers.

[cagadoo]

To Bank Fodder, I am not friends with the broker.  They told me they no longer work with the old insurance companies.  The notice of renewal only contained a summary of cover not the full policy documents.  Only after my asking for the full policy have I discovered the exclusions, but the switch has already happened.

 

Uncle BG, the old policy says I should notify them as soon as possible if something happens but does not set a date.  I did not report anything at the time because there was no claim or action required.

 

It is really hard to know when or what to report.  If you report trivial things all the time, it will just build up a claims history when there has been no loss but you will be covered if a related thing causes a loss later.  That is, unless you switch to a new insurer who will exclude anything that is related to something earlier.

 

The thing I was bothered about was a few months back but stopped before anything bad happened.  However, it might start again so I want to be covered in case a claim results.

 

If I can find a new policy without a lead in period and the problem starts again, will I be covered?

If they say there was a previous problem even though it had stopped months before the new policy, they might not cover me so would the old policy cover it?

I don't think it will.

 

The renewal letter did not include the policy wording, only a key facts statement and did not list the exclusions, so even if I had dealt with it before the renewal I only found out about the exclusion after the old policy ended and the new one started.

 

I will call the broker an try to insist they replace the policy with one equivalent to the old one but it sounded like they did not have any alternatives.

 

I don't know how brokers work but I thought they were supposed to be able to pick from many insurance companies?

 

Thanks for the informative reply.

 

 

 

 

Edited May 28, 2020 by cagadoo

[unclebulgaria67]

Suggest that you register the legal problem with the legal expenses Insurers you had at the time, you first became aware of the problem.

 

legal expenses is normally a separate add on to Home Insurance, so has nothing to with the Home Insurers. Some of the large Insurers have their own legal staff, but many use legal expenses Insurers such as DAS.

 

You won't get cover on a new policy for an existing problem. So get on the phone to the existing legal expenses Insurers and at least have a chat about the problem. They may tell you that they won't provide any help, which can often be the case, as they tend to only assist with cases they believe they have much more than a 50% chance of success with.

[cagadoo]

Assuming I can find a new insurer that covers the peril, it seems they can deny a claim for a new actionable event if they think it is linked to something before the policy started even if there was no actionable claim under the old policy.

 

Can the old policy accept a claim that happens after the policy is finished where the cause of the claim might be due to the same type of events that had started during the policy?  I don't think so, so if I don't have a claim, what help will I get by informing the old insurer?

 

If the problem starts again and results in a claim, on investigation they will find there were earlier issues.

 

If the old policy had been renewed, if a new claim happend after renewal, it would be covered because the same cover was in place during the earlier problem.

 

What if I buy a new policy with the previous insurer?  There is a few weeks gap but nothing has caused a claim in those few weeks.  There is a similar policy also in place during the gap.  The old insurer wording says they will cover events from the start of the policy (without a lead in wait) only if there was unbroken similar cover in place with another insurer beforehand.

 

So, by the broker renewing without the peril covered has lost continutiy.  What can the broker do about it?  I think they are at fault.  The renewal documents did not warn me there were new exclusions.

Edited May 29, 2020 by cagadoo

[unclebulgaria67]

Normally claims are made against the policy that was in force at the time the loss event actually happened, in this case when the legal dispute can be proved to have started.  

 

Yes you can seek a new policy with the same legal expenses insurers.  Not sure this would make any difference.

 

You seem to misunderstand the way these legal expenses insurances work and I think you would find it very helpful, if you actually phoned the legal expenses number in the original policy to discuss this matter.  

 

What you should be totally aware of, is that the legal expenses policies sold with Home Insurances, quite often do not provide any actual help.  They will find reasons why they won't actually cover any legal costs.  And having dealt with Insurance customers for a long time, one reason I often came across for declining legal costs, was a claimant delaying reporting the legal dispute they wanted help with.