Home Insurance Topics Of Interest
This is an alphabetical list of topics related to home and contents insurance that can arise with household claims and the decision or definition that might apply.
Art Loss Register – a database of stolen items set up for the Art market and the insurance industry. It aims to deter art theft, aid in recoveries of stolen art and help fine art dealers to avoid selling stolen proerty. It is not just paintings that are logged. Any item that is uniquely describable and has a value in excess of £1000 can be logged.
Basis of Settlement – you will need to check you policy wording as this should give you a specific definition. I would expect a reasonable insurer to follow similar guide lines to these. Where this is under-insurance but this is less than 10% they should deal as normal. If it is between 10% and 25% they should deal with your clam as normal provided you agree to increase the sum insured immediately to the correct level and pay any extra premium demanded. This should be deducted from your claim if appropriate. Where the under insurance exceeds 25% your insurer will investigate more thoroughly. Have you tried to cheat them out of premium?
Burglar Alarms – generally these are considered to be part of your buildings cover. If you have a security warranty on your policy, make sure you apply it.
Business Use – Many policies exclude business use. If you have any items in your home that you use for business purposes, check the wording of your policy and if it is excluded, see if your insurer will agree to cover the item. If not, find another insurer.
Carpets – this often causes problems! If you are entitled to a new carpet because yours has been damaged by an insured event, and you have the same carpet in more than one room, what are you entitled to? I suggest that a reasonable expectation is to replace the carpet up to the ‘visible barrier’. This is usually a door. For example, with an open plan lounge/diner you should expect the whole area replaced up to the door. Glass doors are not a ‘visible barrier’ . Where you have a glass door and the remainder of the carpet can be seen through the door, you should be able to achieve at least a 50% contribution to the cost of replacing the carpet you can see through the door.
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Clothing – you will always find that claims for clothes and linen will be settled in an ‘indemnity’ basis. That means wear and tear will be deducted. Even if you have ‘New for Old’ cover. Your policy should clearly tell you this. I would expect your insurer to include crash helmets in the definition of clothing!
Co-Habitees – any ‘partner’ of the person named as the insured should be regarded as a member of the family provided there is clear evidence of a permanent relationship and the sum insured is adequate for their possessions.
Contribution – where two or more policies cover the same loss, they can all be called on to contribute to your claim. You cannot claim off them all and expect them to pay you out two, three or four times over. A typical example is where your contents personal effects covers you away from home, e,g, on holiday, and you also have travel cover with baggage included. If your loss is worth £100, you cannot claim £100 from your household insurer and £100 from your travel insurer. (If you did, you would be committing a criminal offence). Instead, both insurers will club together and pay you £100 between them. An agreement from the ABI is in force telling insurers how to calculate their share. Unless you are unlucky, your excess should be swallowed up in the calculations.
C.U.E. – The Claims and Underwriting Exchange. This is a national database holding data on both motor and household claim from most major insurer. It helps insurers to identify fraudulent claims. The message is – don’t even try it!
Cycles – This causes a lot of problems. If you have a bicycle, I strongly recommend you insure it as a specified item on the personal possessions part of the policy and tell your insurers of the serial number. That way, you are properly protected by the policy. If you do not cover it in this way, do not expect to have your claim paid for your cycle unless it is stolen or damage whilst within your home. Again, check your wording! They should always be secured when left unattended away from your home. What is unattended? Even if you leave it outside a shop for a few minutes whilst you buy something inside, that is unattended. You might be lucky where, for example, a child is doing a paper round, leaves it for a moment to put a paper through a letterbox and it is stolen. I would suggest that this scenario is not deemed unattended.
Customs and Excise – Where you have purchased an item abroad and imported it illegally into the country, i.e. you have not declared it and not paid any duties that might be required, you cannot claim for it. See the case law called Geismar V Sun Alliance (1977)
Home Insurance Topics Of Interest (D-J)
Document L – Document L is part of the Building Regulations for England & Wales that sets the standard of energy efficiency in buildings. The equivalent section of Scottish Building Regulations is known as Part J. Click Here for more information.
Drains – You should expect your insurer to pay for blockages in drains where this has been cause fortuitously, under the accidental damage to underground services, provided there are no other untoward features. Drain damage can also be linked to subsidence claims.
Escape of Water/Burst Pipes – You will need to check what your policy says, but generally I would expect a good insurer to take a wide interpretation of this insured event. For example, I would expect water escaping from pipes, leaking radiators, fish tanks and other water receptacles to be included. I would expect gradual leakage to be covered where this was previously unknown by you.
Excess – Where a value exceeds the sum insured, I would expect an excess to be deducted before the application of the policy limit.
Exclusions – Where ‘all –risks’ or ‘accidental damage’ cover applies, remember that the burden of proving that it is not covered rests with your insurer. You do not have to show that the exclusion does not apply.
Extra Cover – Sometimes your loss could be covered by more than one section of your policy. This usually arises with a contents and a personal effects section. Your insurer should meet the claim under whichever section gives you the best possible settlement.
Fire – What damage can you claim for under the fire peril? Generally, there should be actual ignition and damage occur outside the confines of a heating appliance. But you should expect the following to be included. Fortuitous cigarette burns Scorching caused by hot irons and electric fires Refilling of fire extinguishers or pay for metered water used to fight the fire Smoke damage caused by a fire You should not expect your insurer to pay for melting, such as putting a hot saucepan onto a worktop. If the melting correlates to other fire damage where there has been an ignition, then that is a different matter.
Flood – this can be defined as a moving body of water that is usually caused by burst water mains, overflowing rivers, seas and so on.
Fraud – Don’t try to cheat your insurer! The chances are you will be caught out. There are many instances where your insurer might consider you are being fraudulent whereas you feel you are just trying to reduce your premium or increase your claims settlement. I can only say to you, be 100% honest with your insurer at all times. They, in turn, must be 100% honest with you and I encourage more transparency by the insurance industry.
Impact by Animals – This one is interpreted by different insurers in different ways! Some strange ideas have been promoted by media consumer programs no doubt more intent on entertaining than a serious attempt to clarify the cover. Similarly, the accidental damage section might well exclude damage caused by vermin. What you regard as vermin might be different to the claims handler! My old dictionary defines it as ‘creatures injurious to game and crops, noxious parasites and vile persons’ If there is ambiguity, I suggest you quote one of those quasi -Latin legal phrases at your insurer – the contra proferentem rule. If a phrase in an insurance policy is not clear, the meaning more favourable to the policyholder is taken. Damage by domestic pets is usually excluded. It isn’t a risk – it’s a certainty!
Home Insurance Topics Of Interest (K-Z)
Keys – Where cover applies (and not all policies provide it so check your wording) you should expect your insurer to replace all the locks in your house if your keys are stolen. Where car keys are stolen or lost you cannot expect your household insurer to pay for replacement of your car locks. Your motor policy will not cover it either! Where it s reasonable that the thief can determine the car to which the keys belong, a good motor insurer should listen sympathetically to your claim – after all it is in their interests to help you prevent the theft of your car.
Matching Items – another of those very controversial areas. Some wording try and restrict cover to just the item damaged. The minimum you should accept is repair or replacement of the damaged/lost item and a contribution of up to 50% of the replacement cost of the undamaged items to achieve an acceptable match.
Personal Effects – what is a personal effect that you normally carry or wear? You should expect a flexible approach from your insurer who should include any item that could reasonably be carried or worn. But don’t you be unreasonable either!
‘Reasonable Care’ – the test your insurer should consider is whether you have been reckless rather than negligent. If they draw the line at carelessness or negligence, hardly any claims at all would be paid! Insurers will take into account the desirability of the items, the value and what precautions were taken to safeguard them.
Replacement of Goods – in recent years, more and more claims are settled via replacement using the insurers’ supplier. They achieve discounts of retail prices. If you are happy with this, fine. In vast majority of situations, it will be a satisfactory settlement for you. Indeed, you could upgrade by paying extra to the supplier yourself, at the discounted rate. Where, for one reason or another, you want to replace yourself you are entitled to the replacement cost you pay, not the cost your insurer would have paid to their supplier. Where your insurer replaces, they must do so ‘like for like’ unless the unit is obsolete in which case one of at least equal quality and specification should be offered to you and agreed by you. If the unit breaks down after you receive it, responsibility for repair or replacement under consumer legislation would rest with your insurer who in turn can recover any costs from their supplier.
Storm – You might have heard of the ‘Beaufort Scale’. Insurers do not use this to determine if your property has been damaged by a storm. Each case is usually dealt with on its merits, having regard to weather data available and reasonably poor weather prevailing in your area. There have been court cases where the judges have ruled that for an insurance claim to succeed there must be ‘violent wind accompanied by rain or hail or snow’ (Oddy V Phoenix Assurance Co Ltd 1965) or ‘rain accompanied by strong wind’ (Young V Sun Alliance and London Ins Group 1976) or something more prolonged and widespread than a gust of wind (S & M Hotels Ltd V Legal and General 1971). Where the damage is caused by wear and tear or lack of maintenance do not expect your insurer to pay for it. Flat roofs are likely to be rejected for storm damage unless you can prove storm conditions were happening and that you have regularly maintained the roof. Tears caused by falling tiles and debris help. Damage caused by snow should be accepted a storm damage.
Subsidence – This one is likely to cost you! Your excess for subsidence on buildings’ policy will not be less than £500 and in most cases £1000. i.e. you have to pay the first £1000 of the claim. I hope you have been saving your money for this! Insurers prefer to have control of the matter so if you notice cracks in your home, report it to them immediately. If you go and instruct your own surveyor they might well recommend drastic measures to prop up your house that might not be required. You will end up in dispute with your insurer. There are many issues that can arise such as trying to sell your home, trying to change your insurer and so on. It would take a book to answer them all. One I will just mention is that if you have moved your cover from one insurer to another, the previous insurers might be called upon to contribute to your claim under the A.B.I Domestic Subsidence Agreement. This is to prevent disputes between insurers as to who pays for what. It should not affect you at all. But what happens when an underground pipe has leaked and this has led to movement and thus subsidence? What insured peril should apply and what excess do you have to pay? It is in your interests to show that the loss should fall under the underground services peril. That way you do not have to pay the large excess for a subsidence claim. It is all down to what insurers call the ‘proximate cause’. You need to be able to show that the proximate cause of the damage is the burst or leaking pipe.
Underground Services – you should expect your insurer to accept fortuitous blockages as accidental damage and they should be willing to pay for jetting out and CCTV surveys if required. Problems arise where an underground pipe has been leaking and caused subsidence to your home. See subsidence above
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