Home 30% withholding on Claim

Hi,

I have agreed a claim with my insurance company but they are now stating that they will only pay 70% upfront and the remaining 30% on proof of completed work / invoices.

I cannot see anywhere in the policy an obligation to demonstrate that the work is completed or how it is paid for. In addition the 30% withholding is part of a clause saying it is at their discretion (no numerical amount given).

Has anybody encountered this and challenged it?

Many thanks

I will leave aside the quantum argument I am having with them for the moment.

ad14 said:

I will leave aside the quantum argument I am having with them for the moment.

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I cannot answer your first question but I'm currently doing an insurance claim myself, and we are also in the wars, my roofer went out with his men during the xmas holidays, you can just imagine, sent his bill directly to them, (I authorised him to deal direct as I don't want a loss assessor as the last time I used them I was out of pocket) but they have just plucked a percentage off the bill and say they are not paying it. My roofer is really cross. And I'm vexed.

I have requested the Insurer to point out where in the policy they have the right to invoke such rights, will see what they revert with.

Insurers are choosing to exercise the option of reinstatement under the policy. To ensure this is carried out they are withholding 30% as retention. If you do not intend to carry out the repairs then let them know. but expect them to reduce any settlement amount as the policy probably says they will pay the reduction in market value resulting from the loss.

Perfectly valid as per your policy wording.

Bronte said:

I cannot answer your first question but I'm currently doing an insurance claim myself, and we are also in the wars, my roofer went out with his men during the xmas holidays, you can just imagine, sent his bill directly to them, (I authorised him to deal direct as I don't want a loss assessor as the last time I used them I was out of pocket) but they have just plucked a percentage off the bill and say they are not paying it. My roofer is really cross. And I'm vexed.

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Did the insurance company agree any figures? In the absence of them assessing the matter the only thing covered is emergency repairs!

no real problem here. 70% being paid in advance and balance will be paid on receipt of final account. If you repair, you are at no loss.

or am I missing something?

There is a cash flow issue for one, the policy does not have on obligation of proof of expenditure so why do I have to justify what I choose to spend once the liability is assumed by the insurer.

The work is done as it took months for them to accept liability whereas there was no option but to undertake the repairs as more damage would have occurred, the amount offered is lower so as of now I not only have to argue the amount but also the staging of the payments...to my mind once the liability is assumed and they have made an offer that should be it, it will be noted on all future policies and will be a loading on the premium or an exclusion

In addition there is a Central Bank paper from 2013 (cannot post link) that states that only 1 insurer outlines its retention policy in its policy booklet..the fact that they did nothing about that fact is another matter

ad14 said:

There is a cash flow issue for one, the policy does not have on obligation of proof of expenditure so why do I have to justify what I choose to spend once the liability is assumed by the insurer.

The work is done as it took months for them to accept liability whereas there was no option but to undertake the repairs as more damage would have occurred, the amount offered is lower so as of now I not only have to argue the amount but also the staging of the payments...to my mind once the liability is assumed and they have made an offer that should be it, it will be noted on all future policies and will be a loading on the premium or an exclusion

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So you've completely chosen to ignore my point on re-instatement as it doesnt suit your desire to rant about the unfairness?

Central Bank have not currently made a decision on their view on retention and it will be interesting to see what they decide on it.

The whole problem with retention is (a) insurance companies generally dont explain in advance of a claim how their system works, what % they are holding and how you go about getting it back and (b) retention (that is the requirement for reinstatement) generally flies in the face of the deffinition of indemnity as you pay a premium for a risk that once its called in is only partially paid if retention is withheld.

I work both sides of the fence in the insurance world and I would not be a strong believer in the issue of retention but I fully understand why insurance companies with hold it.

ad14 said:

There is a cash flow issue for one, the policy does not have on obligation of proof of expenditure so why do I have to justify what I choose to spend once the liability is assumed by the insurer.

The work is done as it took months for them to accept liability whereas there was no option but to undertake the repairs as more damage would have occurred, the amount offered is lower so as of now I not only have to argue the amount but also the staging of the payments...to my mind once the liability is assumed and they have made an offer that should be it, it will be noted on all future policies and will be a loading on the premium or an exclusion

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Have you read your policy? If so, you will see that insurers will only pay new for old in the event that the work is done. Otherwise, they will only pay an indemnity settlement. The difference between the two is the retention amount that they are entitled to hold. What is incorrect is using an arbitrary amount of 30%.