Policyholders that need repairs carried out after a claim have been left high and dry because contractors have seen payments from Independent Insurance dry up.
Some contractors face financial ruin because they were dependent on the insurer for business.
Brokers and loss assessors have said that contractors are walking off jobs for Independent policyholders, although liquidator Pricewaterhousecoopers (PWC) has promised contractors they will meet all reasonable fees and expenses for work done after the liquidation date of June 17.
Borehamwood broker Brian Hyman said one of his clients was unable to insure his house because the contractor, who has not been paid by Independent for his work on the client's subsidence, will not provide a certificate of completion.
Hyman said insurers should be discouraged from forming direct contracts with preferred contractors to avoid such situations in the future.
“If the debt was ultimately that of the consumer, the consumer could then seek redress from the Policyholders' Protection Board,” he said.
Claims consultant Gary Lane reported a similar situation, in which an unpaid contractor has walked off a £150,000 fire-damage repair job after completing £25,000 worth of repairs.
Lane said the insured was living in a one-room cottage while the repairs were done and now has no idea when he would be able to move back into his house.
“It could be a year before anything is sorted out,” La
