Early claims payment

As a regular reader of Insurance Times, I am often tempted to put pen to paper, in connection with an article or another reader's letter, but lack of time or `letting sleeping dogs lie' means I usually don't.

However, having just read "Building up the Extras" (9 May, Insurance Times), I can't let the opportunity go by to show it isn't just the construction industry that doesn't care how high the bill is, or who ends up paying.

I have had the misfortune, at home, of having a leak from the bathroom. Being a responsible individual, I reported this to my insurer (who will have to remain nameless) and asked if it would send out a surveyor or loss adjuster, to determine the cause, so I could decide what action to take.

Much to my surprise, the insurer responded by saying that I should find my own builder and obtain an estimate of the damage. I wrote again and said I didn't know if a general builder was the best person to establish the cause, but it responded by sending me a claim form to complete and return, with an estimate. Another two weeks elapsed before the builder I had selected returned from his Easter holiday, during which time the ceiling and leak had worsened.

The builder pronounced that there appeared to be some sort of leak from around the bath or shower, but he would need to remove tiles to discover the extent of the damage. He would then also find whether the plaster behind the tiles and below the bath and floorboards needed renewing.

He provided an estimate, which I sent off with a claim form to my insurer and asked if this was sufficient for it to agree to the exploratory work.

Much to my surprise, I received a pro forma letter, with a cheque in the amount of the estimate (less VAT). I wrote back immediately, explaining I had only sent an estimate, which was subject to VAT and that when the work was commenced, the cost might be greater.

A few days later, I received another letter, with a cheque for the VAT, with the comment that if the final invoice was greater than what had been settled, I should send the paperwork and it would issue a further cheque.

While I appreciate a lot of time (and money) can be spent in correspondence in connection with a claim, I find the actions of this insurer incredible. This could have been a bogus claim.

If agreements are being made like this on a regular basis, it won't be long before my (and every other policyholder's) premium will rise to pay for the amounts expended .

David Parry
Towergate Underwriting Group

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