Insurance is not a Maintenance Contract!

The Great British Weather!

Unsurprisingly, Autumn and Winter bring with them the most number of claims for storm damage. From a few tiles coming off in a period of high winds, to a full on disaster like a roof being completely blown off in a near hurricane, your insurance policy sits in the background. It’s your safety net against such misfortune. However…

…Your insurance policy is a two way agreement.

When you took out your policy, there was a question that you almost certainly ticked “yes” to, without giving it a second thought, it was worded something like this: “Is your property in a good state of repair?”  I’ve always thought this to be a rather subjective question, one man’s “good state” is another man’s “right state”, but it becomes a little more serious when it comes to a claim.

The most common claims involving weather damage are roof related and/or water leaks, known in the insurance world as “water ingress”

With regard to the roof, the usual claim involves loss of tiles. This in itself is a fairly straightforward situation, or is it? There’s a period of high winds and rain that batters the roof over several hours, and when it is all over you find half a dozen tiles in the garden and obvious gaps in the roof. The first thing you do is find a roofer and get them around to give you an estimate of the cost of repair. In the meantime you call your insurance company to tell them and, in all likelihood, they arrange to send someone to look at the damage.

In the old days this used to be a qualified Loss Adjuster whose job it was to assess the claim and report back to the insurance company. He was trained and qualified in his field. Nowadays, Loss Adjuster’s are still frequently used, however, in recent years there has been the introduction of firms other than Loss Adjusters being contracted to do this type of work. If your insurance company is sending someone around to assess damage to your property, it is a good idea to find out just who they are and what qualifies them to make such assessments.

Back to the missing tiles…

There are in fact different ways of looking at a claim of this nature and that is where your own responsibility pays an important part. Here are two examples of exactly the same claim, but with very different outcomes. They show the two extremes, and in reality claims may fall at any point between them, but the idea is to illustrate the point.

Scenario 1.
The house is about 20 years old, you bought it 10 years ago and 4 years ago you had a loose tile fixed, had the guttering cleared and had some moss cleaned of some of the tiles. The Loss Adjuster looks at the storm damage and recommends payment of your claim in full. Your efforts in keeping the house in good repair have been rewarded!
Scenario 2.
The house is about 80 years old, you bought it 30 years ago. You have never done any maintenance on the roof. There are numerous loose, missing and slipped tiles, and the moss build up and general weathering prove that some tiles have been dislodged for quite some time. The Loss adjuster looks at the storm damage and recommends payment of the claim, but with an amount deducted because it was not in a good state of repair to start with. it is even possible that the claim be turned down completely, and in the worst case he could recommend that the insurance policy is cancelled completely.

When it comes to a claim, the insurance company will take into account the condition of the property prior to the claim event.

You should also bear in mind the importance of insuring the property for the correct amount. Underinsurance combined with poor state of repair will reduce your claim to a fraction of what it would have been. If you want to find out more about underinsurance and how important it is, just click here.

“Gradually Operating Cause”

The same principles apply to “ingress of water”. If the Loss Adjuster is satisfied that the property is in a poor state of repair, then your claim can be reduced or turned down completely. Another common reason for turning claims down for water damage is the assertion that the damage is a result of a “Gradually Operating Cause”. This is when damage occurs over some period of time, possibly due to a small escape of water that remains undetected until it causes some very noticeable damage.

In common terms, insurance is not there to compensate for problems arising from wear and tear

The Two Way Contract…

An insurance company takes you on as a client on the proviso that you will maintain your property and look after it in such a way that damage to it is minimised. If a potential claim occurs, but it is deemed that you have not kept your side of the bargain, then the insurance company has every right to turn you down.

There are obviously grey areas and should you feel that you have had a claim turned down unfairly, there is a process by which you can appeal a decision and even complain if you feel strongly enough. I have previously written about this in the post, How to Complain Effectively to Your Insurance Company

I hope you never have to deal with the aftermath of damage caused by the weather, but there is no guarantee you won’t. You have taken out insurance to protect you against such things, but to stand the best chance of getting your claim paid in full, you need to fulfil your side of the bargain first.

Equity Release

Your First Steps into Equity Release

I have been around the Equity Release market for over 25 years. I arranged them, researched them, written reports on them and even dealt with complaints about them. I don’t think I have known a product that polarises opinion as much as Equity Release.

For the people that absolutely said they would never get involved with one, most haven’t – but some have gone into the research and have concluded that it is, after all, a good idea for them. I have also dealt with people that couldn’t wait to reach a certain birthday because that would increase the amount they can take. For them, mostly, it has been a good experience, but again I can recall on several occasions, walking away from the situation because in my opinion it would have been a terrible idea.

More than any other product, Equity Release is a plan that is suitable for individual circumstances. Just because you may know someone who has got one, it has absolutely no bearing on whether it would be good for you. In order to find out whether it is going to be a good idea for you, or your parents or grandparents I would suggest taking these steps:

  • Take a thorough and honest review of your current situation.

    This should include all your financial circumstances – assets, income, debts…the whole kit & kaboodle!

  • Ask yourself why you want the money!

It may seem an obvious question, but it needs asking. Be certain why you want the money, be honest about whether it will be enough or not to achieve your goal. Ask yourself how you are going to feel once you’ve spent it. Don’t put yourself in the position of saying “well…was that it?”

  • Talk to a qualified and experienced adviser

    This is crucial. A true professional in this area will talk to you at length about what is good for you. Ask them about their experience and qualifications. ask about professional trade bodies. Taking an equity release plan is most likely to be the last major financial decision you make and the consequences effect not only you but your wider family. A good adviser will not let you proceed unless they are satisfied you have considered everything that is (or should be!) important to you.

old manThis blog is not in any way meant to persuade you for or against taking an Equity Release plan. The purpose, as with everything on the site, is to make you think about the questions you need to ask in order to make the right decisions for you and your family. Over the next few blog posts, I plan to write about what questions you need to ask, to yourself, your family and to professionals working in the Equity Release market

I hope you will pop back and read them as they are published, if you would like to be the first to know when they are, then just sign up to the newsletter!


Next: Equity Release Explained




If you have any questions about Equity Release, contact Dennis direct by completing the form below.

How to Complain Effectively to Your Insurance Company

Why Complain?

For every complaint an insurance company receives, a lot more potential complaints are not made either through apathy, lack of confidence in the process or just “not getting around to it.”

Insurance companies are big beasts and as such they are inevitably going to get things wrong. I always believed that a true mark of a company was not so much what it had done to generate a complaint, but how it dealt with the complaint and the effort it made to impress a dissatisfied client.

There is little point in telling all your friends and family how bad your experience has been, without telling the company direct. It may seem hard to believe, but without customer feedback the people running the company may never get to be aware just how lousy their systems or service are and therefore never get the chance to improve things.

Obviously your desire to complain is not fueled entirely by altruism, and is instead centred on your desire to be adequately recompensed for whatever mess occurred. This can take the form of financial compensation, putting the administration right or just an acknowledgement of the problem with an apology.

It doesn’t matter why you are complaining or what it is about, the strategy you should use is the same:

  1. Keep it to the point

  2. Keep it polite

  3. Keep it going until you are satisfied

Keep It To The Point

Don’t ramble, repeat or go off on tangents.

When making a complaint, always do it in writing. The only reason for using the phone is to get a name and/or an address to write to. This information should be on policy documents and the company website anyway so I’m even doubtful about using the phone for this purpose!

Before writing the letter, make some notes on what the most important part(s) of your complaint are. These should include:

  • A brief outline of what has happened
  • Your name and policy number
  • Relevant dates
  • Any names you have had contact with and when
  • Details of any promises made to you, when and by whom
  • What you want to put things right
  • An accurate statement of costs you may have incurred
  • oh yeah…put the word “COMPLAINT” clearly at the top of your letter

This list is not exhaustive as each case is different, but these are the main points the company will be looking for.

Once you have made your notes, put them in a logical order and write your letter, use bullet points if you are happy to do so. They are short, punchy and easy to refer back to.

Don’t go on and on about how you feel, or the effect it has had on you and the world in general. If you are upset or annoyed then say it. But just the once. Don’t write paragraphs about how you have a nephew working in insurance and therefore you know all about the product/company/micro fiscal policy etc.. It has no relevance and can possibly slow the process down

Keep It Polite

Never. I mean never, use language you mum would be upset at. Never make it personal, and never threaten (unless it is just pointing out you can take the matter to the ombudsman. Which they really should know already!)

Keep it Going…

Although it is a bit shoddy, some companies may use a standard reply to your first approach. You may feel it is a tad woolly and doesn’t address address your concerns properly. Don’t give up! Take the time to write again, reiterating your points and highlighting where you think they have failed to address them.

Follow the Process

It might be a pain, but if you follow a prescribed process, it will speed things up – eventually! All companies have set complaints procedures and required time limits to do certain things. If a step is missed, it is like playing snakes and ladders and you will be taken back a few places in order to tick the required box.

If there was one “tip” that is more important than any other it is…

Keep a copy of everything…You WILL need it!

Still Not Happy?

You must give your provider the opportunity to resolve your issue. Sometimes though, this just doesn’t happen. If you get to the point where the company flatly rejects your complaint, you can then go to the Financial Ombudsman Service. Do not go to them any earlier, if you do, they will just refer you back to your company as it will be seen as still being a dispute with them.

The Financial Ombudsman Service is independent and free to use. They have a great website which is simply laid out and easy to follow. The biggest downside is that they receive about 5000 enquiries a day so their workload is large. Be prepared to wait several months for the matter to be concluded.