Tag Archives: loss adjuster

Insurance Policies and the Average Clause

We hate it when anyone loses out on their insurance claim. During a single fortnight recently, two Policyholders we’re acquainted with lost large amounts — and the cause in both cases was the Average Clause in the Insurance Policy.

These people had £50,000 and £135,000 docked from their pay-outs — and not because the Loss Adjuster was being at all devious. It was because they hadn’t realised they needed to keep their policies up to date over the years, in particular updating the value of their properties. They’d simply renewed the policy as if the value hadn’t changed.

This is where the Average Clause comes in.

When you insure your assets, such as your home, one of the pieces of information you supply to the Insurer is the “insurance value”. This becomes the sum insured under your policy and the basis for calculating your Insurance Premium.

If the insurance value on your policy is lower than the actual value when you come to make an insurance claim, you won’t have paid enough on your premiums to cover the full value. Not unreasonably, Insurers are unwilling to cover the extra costs.

The Condition of Average

The Condition of Average is inserted into insurance policies to protect Insurers from this situation. Put most simply, it says that, for instance, if you’ve only declared 50% of the insurance value, you’ve only paid 50% of the premiums and the Loss Adjuster will thus only allow 50% of your claim.

To take an example, if the insurance policy covering a building is for £50,000 and the actual insurance value at the time of loss is £100,000, the proportion of Average will be just 50%. That means that, whether the loss is minor or total, you’ll only receive 50% of any claim you make.

In this situation, if you were claiming £50,000, with an excess of £250, the calculation would be:

  • 50% Average of a £50,000 claim = £25,000
  • Less policy excess of £250 = £24,750 pay-out
  • Total loss on £50,000 claim = £25,250

A loss of this size could be devastating, so if you’re unsure whether you’re up to date under the Average Clause, consult your insurance broker as soon as possible. Or you’re very welcome to get in touch with us for a chat about it.

Damage Mitigation — Why It’s Vital for Your Insurance Claim

Suppose you’ve been burgled. You find your door broken in and your most valuable possessions gone. You’d call the police, naturally, but would you then go off to work without bothering to get your door repaired enough to lock it?

Of course you wouldn’t, but it does happen, and anyone behaving like that is creating serious problems for themselves.

Damage mitigation is an important principle in both law and insurance claims. It means that, if you’ve suffered loss, you must take “reasonable action” to prevent further loss, otherwise either the courts or the insurance company’s Loss Adjuster can refuse to compensate you.

This isn’t bloody-mindedness. If, for example, you were to go straight out after a break-in and leave your home unsecured, it would be impossible to prove what had been taken in the original burglary and what had gone as a result of your negligence. In those circumstances, the Loss Adjuster might be justified in refusing to pay any of your claim.

The same applies if you leave your home or business premises at risk after a fire or flood, rather than undertaking essential structural work at the earliest possible opportunity. Damage mitigation is vital if your insurance claim is going to succeed — as well as being common sense.

How Can a Loss Assessor Help with Damage Mitigation?

There are many reasons why it’s vital to appoint a Loss Assessor as soon as you know you’ll be making an insurance claim, and damage mitigation is one of the most important.

A Loss Assessor will always work for you to get the compensation due to you — after all, they don’t get paid if you don’t. But it’s no good having a Loss Assessor if you’ve already failed to meet your damage mitigation obligations.

If you appoint a Loss Assessor at once, they’ll be able to see what needs to be done straight away, such as emergency work to prevent further damage to your property, and arrange for it to be done. They’ll also undertake a thorough survey of the damage, which can be used to support your claim for the losses you’ve suffered.

Appointing a Loss Assessor at the earliest opportunity could make the difference between success and failure in your insurance claim.

Remember to Have Your Chimneys Swept Before Winter Sets In

How long is it since you last cleaned your chimneys?

As winter draws in, there’s nothing like a roaring fire in the grate to make you warm and cosy in your home. It comes with a price, though, and that includes have the chimney swept on a regular basis. A blocked or dirty chimney can cause serious damage — perhaps even a fire that destroys your home.

This is because any soot left in the flue can ignite when it heats up, not to mention other debris, such as birds’ nests or spider webs, that might have found its way into the chimney. At best, that could damage your flue, and at worst it could burn your house down — and, if you try to make an insurance claim when you’ve neglected your chimney, the loss adjuster could turn you down.

A blocked flue can also release deadly carbon monoxide into your home, from the gases coming back down the chimney.

How Often Should a Chimney Be Swept?

The fuel used in the fireplace dictates how often your chimney needs to be swept. A coal-fire chimney should be swept at least twice a year and a wood-fire chimney quarterly when the fireplace is in use. If you’re using smokeless, gas or oil fuels, you’re usually safe keeping it to once a year — but remember that all gas-related work should be done by a Gas Safe engineer. Always be safe with your gas appliances.

A few basic safeguards will help you enjoy your fire securely and make certain that, if you do suffer a fire, the loss adjuster will have no reason to refuse your claim:

  • Have your chimney swept before you start using the fireplace.
  • Keep the grate clean, making sure it’s free from ash and soot.
  • Avoid using damp wood, as cooler smoke creates more ash.
  • Using a fireguard in front of an open fire can prevent sparks flying out from the embers.
  • Don’t leave a fire burning unattended — extinguish it before you leave the house or go to bed.
  • If you’re using wood, don’t leave your supply too close to the fire, as it could ignite.
  • And — invest in a carbon monoxide alarm. Your life and your family’s lives might depend on it.

Chimney sweeps used to be considered very lucky. Maybe that’s because people back then realised that their job could save lives.

Top 5 Building Insurance Claims

Most people who own a property, whether it’s their home or a business premises, have building insurance for it. In fact, it’s normally compulsory if you have a mortgage on the building — otherwise, it’s just overwhelmingly sensible.

A normal building insurance policy covers a wide range of mishaps. Accidental damage is the most common insurance claim, but others are frequently found. Here are the top five:

  • Accidental Damage — this could be anything from the kids kicking a football through the window to cracking the wash-basin by dropping something into it.
  • Weather Damage — extreme weather can damage your property either directly, such as a storm blowing off tiles, or indirectly, such as a tree being blown onto your roof.
  • Water Escaping — the most common reason for this is pipes being allowed to freeze and burst.
  • Burglary — a break-in doesn’t only affect the stolen possessions, you may also need to claim to repair a smashed window or replace a door.
  • Malicious Damage — this may occur during a burglary, but you could also find yourself the victim of vandalism.

Prevention Is Better than Cure

Most building insurance policies allow you to claim for all these and more, from fire damage to the effects of freezing weather. However, the insurance company’s Loss Adjuster will be on the look-out for any negligence on your part that may invalidate your claim. The best solution is to give no reason for this, and here are few of the most common examples:

  • Improving the standard of your locks and installing a burglar alarm can significantly reduce the risk of being burgled, but if it does happen the Loss Adjuster would find it difficult to turn down your claim.
  • If you have a chimney, it’s vital to keep it swept. This will reduce the risk of fire, as well as satisfying your insurer.
  • Leaving your gutters blocked with dirt or leaves can cause water damage and could leave you at risk of your claim being rejected.
  • Freezing weather can cause a range of problems, from structural damage to burst water pipes. These may be covered by your building insurance, but it’s far better to prepare before the weather turns cold.

You can claim for many things on your building insurance, but it’s even better to reduce your chances of needing to claim. And, in any case, your precautions mean the Loss Adjuster will have no ammunition for rejecting your claim.

Legal Expenses Cover and Your Home Insurance

Most insurance claims are straightforward. If you’ve had a fire, your home’s been flooded or your roof has been blown off, there shouldn’t be a problem claiming — although the company’s Loss Adjuster may still find a flaw in your claim.

Sometimes, though, an insurance claim can be a lot more complex. You could find yourself having to seek legal advice, or even pursuing or defending a civil action.

This is a problem, since solicitors don’t come cheap. If you have legal expenses cover as part of your insurance policy, though, both legal advice and costs in a civil case would be covered.

How Does Legal Expenses Cover Protect You?

Having legal expenses cover can protect you against legal expenses in a wide range of situations, including:

  • Personal injury or death — If someone is claiming compensation for an injury sustained on your property, your legal expenses will usually be covered up to a specified amount.
  • Purchase or sale of property — You’re protected against expenses from contractual disputes during the sale of a property — with an estate agent or removal company, for instance.
  • Property disputes — The costs of a dispute over boundaries, noisy neighbours, damage to property and similar causes will be covered.
  • Consumer disputes — If you buy, sell or hire goods in your home, your expenses for disputes are covered.
  • Employment disputes — Legal expenses cover can pay the costs for an employment dispute, such as unfair dismissal, involving a tribunal.
  • Tax investigation — You can claim legal costs involved with HMRC investigating your tax affairs.

Legal expenses cover may already be included in your home insurance policy, but if you don’t know it’s there you could lose out. On the other hand, if you find your policy doesn’t include it, perhaps it’s time to rethink your home insurance cover.

 

High-Value Possessions — How to Make Sure They’re Covered by Your Insurance

Our last newsletter, on setting the right level of contents cover, seems to have sparked a lot of interest, judging from the questions we’ve received. Many of these have been about the thorny issue of high-value possessions.

What Are High-Value Possessions?

Put simply, a high-value item is any possession valued at above the allowed level specified in your insurance policy. Most people think in terms of jewellery and watches, but it could be books, art, collections, equipment or even clothing. And they’re not only at risk of burglary. Fire or flood can destroy possessions of high monetary or sentimental value.

You may have some idea of the value if you’ve bought the item yourself, though it may still be higher than you thought, but if you’ve received it as a gift the chances are you won’t know the value. If you’re in any doubt at all, it’s best to get items valued, and they should be specified in the policy if they’re above the value — otherwise, the Insurer’s loss adjuster is likely to refuse payment for them.

In almost every case Allied Claims comes across, the policy-holder assumed it would never happen to them. In one recent case, for instance, the claimant lost out on an entire £91,000 claim because they were under-insured and hadn’t specified several high-value items.

How Do I Make Sure I’m Covered?

It would be easier if there were a one-size-fits-all procedure, but the reality is that each Insurer has different criteria for what constitutes high value and what kind of proof you need for claiming. It’s up to you to check this, but the basic steps that are usually needed are:

  1. Identify the high-value amount per item set by the Insurance Company.
  2. Disclose and itemise each relevant piece in the policy.
  3. Photograph each item and keep all the photos in a safe place.
  4. Keep the original invoices if you’ve bought the item yourself.
  5. Have valuations done every few years for each item by a reputable dealer who knows what they are doing.

This won’t necessarily be all, though. The Insurer may well impose extra conditions, such as burglar alarms and safes, or they could require particular items to be kept in a safe depository. They need to be aware of the value to determine what’s necessary, though, and if you don’t inform them your insurance claim could be invalid.

Insurance Claim and Occupancy Clause on Household Policies

Water damage insurance claim

Before you make an insurance claim on any insurance policy you have, it’s essential to read through all those fine-print clauses. Yes, it might be boring, but not nearly as bad as being hit by a restriction you weren’t expecting when you try to make a claim.

A case in point is the Occupancy Clause.

Most home insurance policies, and the majority of policies for commercial properties, include a clause that addresses the “occupancy issue”. The exact wording will vary from policy to policy, but what they all say boils down to stipulating a maximum length of time the property can be left unoccupied, if you need to make an insurance claim is usually 30 days.

If you’re intending to leave the property unoccupied for longer than this, the Insurer must be notified, preferably in writing or by email, and specified actions must be taken by the Policy holder. The most common are that the heating must be kept on, bi-weekly visits must be made, and that an alarm must be installed.

However, it’s vital to check exactly what your policy says and make sure you know what needs to be done, in addition to informing the Insurer if the property is going to be empty for more than 30 days.

This can apply to any circumstances when the property will be unoccupied, but it’s particularly relevant to anyone letting out a property. The landlord must notify the Insurer as soon as the tenant has moved out. In many cases, the landlord will be making repairs or decorating before the new tenant moves in, and this can easily stretch out beyond 30 days so watch out if you are about to make an insurance claim.

Whether your insurance is for a domestic or a commercial property, make sure you know your obligations under the Occupancy Clause. If you don’t, there’s a good chance that you’ll be left without a penny if you have to make a claim.