Andrea asked us to get involved when her insurance company cancelled her policy and refunded her premiums. This was after she had put in claim for £120,000 worth of jewellery that had been stolen from her home.
Andrea found that her home had been broken into, and discovered that all her jewellery was gone. She immediately called the police to report what happened.
She called her insurer to explain the situation, and a loss adjuster interviewed Andrea to get details on the stolen items. There were a lot of items on the list, many of which were jewellery. The loss adjuster decided that the value to replace all the stolen items would come to £120,000.
When the insurer company got the report from the loss adjuster, they decided to cancel Andrea's policy and refund her premiums. They explained to Andrea that she was only insured up to £25,000. To them, Andrea had under insured her items, so voiding the policy was the only option they could take. They said that if they'd known the true value of the item, they wouldn't have insured Andrea.
But Andrea felt that this decision was unfair, as she thought the valuation figure was too high. She felt that the items stolen wouldn't have sold for the amount given. The insurer explained that they would have to replace the stolen items with brand new versions. This is why the figure was so high. But Andrea felt it was right to bring this to us to look into.
What we said
The first thing we needed to do was see how the loss adjuster got to the amount they decided. The insurer gave us the list of stolen items, which Andrea had signed, as well as evidence of their cost. We couldn't see anything wrong with the loss adjuster's figures.
We then needed to look at whether Andrea had in fact under-insured her items and if the decision was unfair. We asked to see Andrea's policy to see what she was asked when she took out the policy. There wasn't much information in the original policy, but it had been renewed several times since.
With each year's renewal forms, there was a covering letter. In bold text, it said: "Please ensure all the information you provide is accurate and up to date, as any inaccurate information could impact upon the success of future claims." We also saw that on Andrea's renewal forms, which she had signed, it said: "Please check this information carefully and call us immediately if anything is untrue, incomplete or out of date so we can send you new documents."
Below the contents section Andrea had to confirm that: "the full cost of replacing the contents of your property does not exceed £25,000."
The insurer said that if they'd known the true cost of Andrea's items, they wouldn't have insured her. They sent us their underwriting guidance to help explain their point further. In the guidance it said that insurance wouldn't be granted if the contents were worth more than £100,000, or if there was an 'excessive amount of jewellery.'
We decided not to uphold Andrea's complaint. It didn't appear that Andrea had taken the right amount of care to complete the forms with up to date information. We also agreed that if the insurer had known the true cost of the items, they wouldn't have given the insurance.
We sympathised with Andrea that she had gone through a very distressing situation. But we didn't feel that the insurer had treated her unfairly with the evidence we had seen.