This time we are putting Tim Johnson, chief executive at Paymentshield, on the spot with the following question:
Q: My clients often think that insurers will do everything they can not to pay out on a claim. What advice can I give that will help them avoid their home insurer turning down a claim?
A: Firstly, people are wrong to assume that insurers try to avoid paying claims as that simply isn’t true. However, there are of course instances where claims are rejected by the insurer so let’s look at what customers can do to avoid this happening.
Firstly, one of the main reasons claims are declined is that the customer was never actually covered for the incident they’re trying to claim for. For example, if all the customer looks at when choosing a policy is the cost they may not realise that their policy doesn’t include cover for things like accidental damage or loss/damage to personal possessions when worn or carried away from the home.
Unfortunately, this means the customer may be left to cover the costs of repairing their home after a DIY disaster or replacing the contents of a stolen handbag which included their phone, camera, car keys and money.
So, my first tip is to tell them not to get distracted by a good price, read the small print and make sure they regularly review their cover to check it still meets their needs.
People should also be aware that wear and tear is rarely covered and they are responsible for keeping their home in good order. For example, light winds blowing off tiles from a roof that is in a poor state of repair would not have a good chance of success.
The purpose of home insurance is to cover you for the unexpected, not from events you could have done something to prevent. Therefore home owners should regularly check the state of their property inside and out.
Customers should expect that any matters which could be pursued through the civil or criminal courts are unlikely to result in successful claims. For example, consumers should be able to sue poor workmanship by third parties to put the damage right.
Consumers are also often surprised that their insurer will generally ask them to provide proof for items that have been stolen or damaged before paying a claim. This does not have to be a difficult task if customers are prepared. Every home owner should keep photos of their valuables, and scanned receipts/valuations in a safe place.
One idea is to save photos on a computer, but also email them to a webmail account so they can be accessed by a claimant even if that computer has been stolen or damaged.
Buildings insurance is often mandatory for mortgage holders but some people choose to try and save money by not covering their contents which could see them having to find substantial amounts of money to replace their contents if they were damaged by fire or flood or stolen during a burglary.
Of course, every insurer will differ in what it will cover and what it will not. This means that the most important thing in every instance is to check the paperwork with your client to ensure the level of cover meets expectations and requirements – all policies are not created equal, and they need to know that the cheapest is not always the best option.
