We have noticed an increase in disputed claims in which insurance companies are relying on Policyholders’ conduct during the claims process to decline claims. This article therefore reviews claims co-operation provisions, identifies where problems may arise and provides guidance to avoid problems arising that may prevent valid claims being paid.
A Policyholder will often be in a vulnerable position immediately after an insured event. A Loss Adjuster arriving quickly on site after a fire or flood can often be mis-understood by the Policyholder to be representing them in securing an insurance payment from the Insurer.
This is not the case; a Loss Adjuster is very clearly the agent of the Insurer and his duties include investigating the cause of loss, confirming whether Policy conditions have been met and enquiring about the nature and extent of the loss.
Claim Co-operation Provisions: It is important that, as the Policyholder, you demonstrate compliance with the conditions of your insurance policy including the claims handling provisions. These provisions generally require you to co-operate fully with the investigation. It is not appropriate, therefore, for a Policyholder to simply refuse to meet a Loss Adjuster, or to refuse to provide documentation, as that could form a ground for refusal of the claim itself. However, care must be taken to ensure that information provided to Loss Adjusters is accurate, complete and not contradictory.
Common Problems: There is a danger that in an honest attempt to progress the claim promptly the Policyholder may do something that puts into question their credibility and the credibility of their claim. To illustrate this, we have dealt recently with problems, for example in Commercial Property Fire Claims where Policyholders have been interviewed by the Loss Adjuster on a number of occasions and unwittingly provided either inconsistent statements or statements which are contradicted by a third party, for example a fire report. It is vitally important to be aware that your account of events must be accurate and full from the outset to prevent inconsistencies being used in this way to justify declinature of claims.
Dispute Avoidance: While Policyholders need to meet the obligations of their insurance contract, a careful balance must be struck to ensure that information is provided on a fully informed and controlled basis. For example, we recommend that requests be made for sight of relevant reports, such as fire investigation reports, valuation reports or similar and that great care is taken to ensure that any written and oral statements you provide after an incident are consistent and fully accurate.
In most cases, a claim will progress smoothly. However, where claims appear to be potentially contentious, a Policyholder should consider taking take early legal advice.
In particular, on a major claim, the applicable Policy wording and schedule and any proposal form will need to be located promptly and checked over for any potential non-disclosure or breach of condition issues.
Where a Policyholder is asked to provide a formal witness statement, this is a potential warning sign that the Loss Adjuster or Insurer thinks that the claim may be one to decline. In these circumstances, it is entirely reasonable for a Policyholder to consider having legal representation present at any interview.
Other warning signs to watch out for include appointment of a forensic examiner, unusual delays in confirming acceptance of your claim or numerous requests for information on issues connected to warranties or disclosure. Where a matter looks to be potentially contentious in this way, it is likely to be in your best interests to instruct solicitors as soon as possible.
Our experience is that where we are asked to get involved in a claims process many months after the event it can be much harder to move an insurer or loss adjuster from an entrenched position or explain any inconsistency in evidence, given earlier, in rushed circumstances.
CCL can assist in the early stages of a claim by explaining what to expect prior to interview, analysing any potential reasons for repudiation of the claim, collating any additional helpful evidence, and ensuring that any statements made in support of the claim are consistent, accurate and full.
In respect of claims that have been ongoing for some time CCL can assist Policyholders in presenting full and accurate evidence and advising about the validity of any arguments raised by an insurer.
CCL has considerable experience of dealing with disputes relating to both domestic and commercial insurance policies and, in the event, a dispute cannot be resolved between the parties, CCL can assist eligible Policyholders in referring a complaint to the Financial Ombudsman Service or commencing litigation to secure an insurance payment.
