Home Sum agreed with ins co - received cheque less retention sum! whats that? vat invoices

I recently had a claim on my home insurance.

A sum for the damage was agreed with the insurance company and i received the cheque minus a retention sum.

A letter with the cheque explained that when the work was completed i should send in a vat invoice for the work completed along with some photos.

My questions are do i have to get the work done that i was paid for and do the insurance company come out to the house to check that the work was completed if i can get a vat invoice?

Yes you have to get the work done. This was what was agreed. Otherwise the sum paid out would have been different! And yes they will want to check the property and the work is completed before they pay the rest, hence the retention!

godthe said:

I recently had a claim on my home insurance. A sum for the damage was agreed with the insurance company and i received the cheque minus a retention sum. A letter with the cheque explained that when the work was completed i should send in a vat invoice for the work completed along with some photos.
My questions are do i have to get the work done that i was paid for and do the insurance company come out to the house to check that the work was completed if i can get a vat invoice

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Under the terms of your policy, you are entitled to be indemnified. That is, you are put in the same position following the loss that you enjoyed immediately before the loss . In addition to that, your policy, depending of course on the wording of your policy will provide you with new for old cover...in other words, give you "new for old"..ie, new decorations where the damaged decorations were 10 years old.

However, one of the conditions of this cover is that reinstatement is effected. Insurers will only pay you "new for old" in the event that you have the work carried out and you incur that cost. It is for this reason that a retention is held pending you having the work carried out and incurring the cost up to the amount you have been allowed in settlement. Insurers will require VAT invoices and proof of reinstatement.

In theory, the retention amount should represent the difference between the cost of "new for old" and the indemnity cost ( reinstatement less prior wear and tear). However, this concept to a large extent is abused because it is not readily understood by many insurers.

In essence, at this stage the OP has received an indemity settlement and will avail of the "new for old" settlement, when it is proven that that all costs have been incurred. Otherwise, the OP is only entitled to an indemnity settlement. Provide invoices showing that full costs have been incurred, or insurers will not release the retention. If the retention has been properly calculated, then insurers will be within their rights not to release the retention unless full costs are incurred and proof of this provided.

Chartered Loss Adjusters withholding VAT

Is this unusual or the norm?

Claim made for flooding damage. Claim agreed. There is an intermediary between the insurance company and the claimant (Chartered Loss Adjusters) who signs the check but only for the total amount less VAT. The VAT element will be paid out on production of final invoices.

I don't know what the norm is but I wouldn't have thought it was anybody's responsibility to collect VAT other than the service provider and Revenue.

The retention amount is held by the company until proof of the purchase of materials and finished work is produced. This is generally the norm.



www.powerinsurances.ie

So what happens if you can't subsequently produce receipts to cover the full claim? Do they seek refund on the apparent underspend or pay out the proportion of VAT accounted for in the receipts?

There is a very recent thread called "Retention sum" which outlines the position. In addition to my post on that, I would add that like all other consumers, Insurers will only pay VAT upon receipt of a VAT invoice complete with valid VAT number. Insurers, like the rest of us, should not make a payment of VAT unless we can be satisfied that the VAT is passed onto the revenue.

Why would not be able to produce receipts?

related threads merged

Hi guys, I have an investment property which was flooded earlier this year. I employed a builder to repair the damage and paid him after my brother (I was out of the country) checked the house. The property has since been re-let. I sent the VAT invoice I received to the insurance company along with some pictures of the property in its current state in August in order to get the retention.

The insurance company's adjuster has since inspected the property and contacted the builder claiming that all the works weren't carried out.

Where does this leave me?

Thanks in advance.

Mo