Consumer questions loss adjuster's valuation after fire

Insurance Valuations

When Bryan’s home was damaged by an electrical fire, he got in touch with us as he felt the loss adjuster’s valuation was wrong.

What happened

Bryan’s home had only been insured for a few months when disaster struck. An electrical fire broke out and although firefighters were able to put it out, a few rooms in his home were damaged.

Bryan called his insurer to make a claim and they sent their loss adjuster to inspect the damage. They estimated the cost of rebuilding Bryan’s house at around £150,000 – but it was only insured for £100,000 – so they said it was underinsured.

The insurer accepted the claim but decided to settle it proportionately, so Bryan only got part of the maximum £100,000 he was insured for.

Bryan didn't think that this was right, so he complained to the insurer. He questioned the loss adjuster's valuation and said that he wanted the full payment. He pointed out that his house was built using a timber kit, so was much cheaper than traditional brick buildings.

The insurer wouldn’t change their mind, so Bryan asked us to look into it.

What we said

We asked both sides what had happened. The insurer showed us that when selling the policy to Bryan it had clearly asked him to estimate the cost of rebuilding the property from scratch, which we were satisfied was a clear question.

Bryan gave us all the evidence he had about how much the house originally cost to build a few years earlier. It came to around £75,000, included all relevant costs, and showed the house was built from a timber kit.

The insurer gave us the loss adjuster’s final estimate for the rebuild cost. It included similar details to Bryan’s information, except it assumed the house was built from brick.

It seemed to us that the loss adjuster hadn’t factored in that Bryan’s house was built with a timber kit. So the insurer hadn’t shown that Bryan’s estimate was unreasonable.

When we considered the information Bryan had available to him when he estimated the rebuild cost and how he came to the estimate, we didn’t think it was unreasonable. So we didn’t agree he’d underinsured the house. We decided that the insurer should meet Bryan’s claim as though he wasn’t underinsured. So they paid him the money that had originally been deducted from the settlement.