A loss assessor, who works as your advocate, can be vital when insurers dig in their heels and reject your claim
Drew and Elizabeth Thomson suffered every homeowner's worst nightmare two years ago when a fire swept through their house, causing £500,000 worth of damage, and their insurer's first response was to deny liability.
The couple had rented out their six-bedroom home in Billingshurst, West Sussex, after Drew, who works in the semiconductor industry, was relocated to Austin, Texas.
The Thomsons found themselves facing questions as their insurer's legal team "became aggressive as they looked for any opportunity to reject our claim".
Meanwhile, the couple were paying the mortgage on a home that was no longer habitable, and was becoming increasingly damaged because no repairs could be done. "We were forced to hire a local lawyer as it quickly became obvious that we couldn't handle this situation 5,000 miles away," says Drew.
The couple then took on a loss assessor from Morgan Clark. They work as the policyholder's advocate, handling all the legal work, and working with other professionals such as surveyors, contracts and solicitors.
Many loss assessor's work for free, provided you agree to use their network of surveyors and specialist contractors to repair the damage, as this earns them a management fee.
"Our loss assessor knew what to look for and understood policy wording, vital in getting the insurer to accept liability," Drew explains. Once Morgan Clark had won a payout it appointed contractors to reinstate the property.
As Drew adds: "Everyone signs up to these policies in good faith, but when they claim all that may count for precious little. Without expert help, I don't know how we would have got through."
The Financial Ombudsman Authority resolved 223,229 complaints in the year ending 31 March 2013, double the 2007 total, finding in favour of consumers in half the cases. While PPI mis-selling is partly behind this sharp increase, there is another worrying trend: financial services companies such as insurers and banks, are increasingly digging in their heels and refusing claims.
More than one in five final ombudsman decisions were for general insurance, such as household, motor and travel insurance. Banking, PPI, investments, mortgages and pensions were the other main sources of appealed cases.
If you feel unfairly treated by a financial services company, your first step is to complain to the business concerned.
If it doesn't satisfactorily resolve your complaint within eight weeks, contact the Financial Ombudsman Service. Do this within six months. The service acts as an independent adjudicator and is free and informal. If dissatisfied, you can still pursue legal action. You may need to appoint a loss assessor or solicitor if your claim is for more than £150,000, the maximum the ombudsman can award.
Marc Ross, technical director at Morgan Clark says: "We have to deal with families who have been traumatised by fire or the recent floods and then face the burden of making what can be a very complex claim. Having an expert on your side can make a huge difference."
Don't give up, says building industry worker Alan Wisbey, 61, who lives in Sevenoaks, Kent. He suffered serious leg injuries after falling down a flight of stairs at work in 2010, but when he made a public liability insurance claim the insurer offered him just £5,000. He got in touch with specialist personal injury solicitors Slater & Gordon on a no-win, no-fee basis. "Suddenly, I had somebody on my side." Four years later, Wisbey's claim is about to be settled. He will get £90,000 compensation and his lawyer's costs were paid by the insurer.
Angrypolicyholders.com is a support group for people whose claim has been rejected. It was set up by Chris Hargreaves, a chauffeur from the Greater Manchester town of Bury, who spent two-and-a-half years battling Scottish Provident after it rejected his income protection claim following serious illness. The claim was eventually paid after he launched a one-man Twitter campaign that attracted 13,000 followers.
"Insurance companies have money and expertise at their disposal but if you fight them, you can win," he says.
BEFORE YOU BUY
The number of insurance disputes is likely to grow as more people use comparison sites without really understanding what they're buying, industry experts warn.
Four out of 10 people who bought insurance in the past 18 months used a price comparison site, says Steve Jenkins, director of financial services and insurance markets at the Chartered Institute of Insurers. "Policies are listed with the cheapest first, but you should never buy on price alone. You have to know exactly what you are getting."
You must disclose all relevant information, including previous claims, says Graeme Trudgill, executive director of the British Insurance Brokers' Association.
You should also read your policy small print to ensure that you are complying with all the conditions. For example, a household insurer may reject a burglary claim if you fail to fit the right door and window locks, Trudgill says. "To make a claim, you may also need to produce evidence of any loss. It helps if you have receipts, or failing that, the box your stolen PlayStation came in. Insurance fraud is widespread and they need to make sure any claim is genuine," he adds.
Source The Observer
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