Insurance claim for flood damage- Is the company allowed to do this?

I have placed a claim for the contents of my house due to flooding. The insurance company is wanting to pay us the vast majority of the claim in vouchers and set us up with their suppliers. We do not want to replace some of the damaged stuff but are we still entitled to the cost of these items since we are fully insured for them?

They are entitled under the terms of their policy.

Most Insurers cover on a new for old basis. That is, if an item has been damaged, they will replace with a new or equivalent item. They do not have to send you cash.

Without seeing your insurance policy I can't be sure but I don't think you have any grounds for complaint. I don't think you an expect to get cash for something you are not replacing. You are insuring to cover replacement of items lost not to allow you to make some sort of change to what you have in your house. The only way you could do what you want is to accept insurance replacements and then sell them. However don't expect your insurance company to be happy if they find out.

That's interesting. My thoughts......

Insurance companies are in the business of insuring....not repair and warranty. If they set you up with 'their' supplier - they in essence take on additional liabilities in case anything happens.

Also - never heard of any claim being settled with 'vouchers'.

Read your policy. There will be a section called "loss payments". That sections will outline in what ways they can 'make you whole' under the policy.

Usually, it will say that they can REPLACE the items - which most insurance companies don't want to do because of what I said above. They will do it for things like jewelry but usually not for things like ovens.

They can also pay for the depreciated value (also known as the acv or actual cash value). Most people have ACV policies and HATE it when the insurance company only pays them the depreciated value.

However - traditional FLOOD is not covered by traditional homeowner's policies. (Flood = water that overflows from the banks of the waterway) The government provides flood coverage and only in areas that are deemed to be flood plains (usually - designated as a specific area around a water way)

So.....if that is the kind of flood you're talking about...can't help you there.

If you're talking about a back up of sewer or overflow of water from plumbing or something else like that - your traditional homeowner's will apply accordingly.

Gosh - sounds like a lot, huh?

Hopefully it helps a little. Goodluck!

~jifr!

ps - um.... just read a response above...in ANY insurance claim - you don't EVER have to replace anything. You are entitled to compensation (in whatever ways are noted in that loss payments section of the policy.......monetary compensation (cash) is one of them.

People NOTORIOUSLY will take money for repairs to their car and never get the car fixed. The insurance company does NOT get off the hook because you don't get it fixed. Whether you do or not is up to you. Not the insurance company.

BUT - if you want to recover the RCV (replacement cost coverage)...you WILL have to buy the replacement items and submit documentation to get the difference. (RCV = ACV + the cost to replace........say you get $250 ACV for a television that costs $350. You go out and replace the television @ $350 and then you can submit that recpt to your insurer to get the difference....provided you have an RCV policy, of course. )

:-D

My instinct is that I doubt this is something you have to accept unless it is detailed within the terms & conditions of your policy wording. I suggest you ask your broker for a copy of both your schedule and policy booklet and that you read through them. Do not accept the offer in the meantime until you have read through both and if you are pressed by the insurers state that you dispute the claim can be settled in this way and you won't formally accept the offer until you have looked into it further. At the end of the day you can always seek further advice by contacting the FSA http://www.fsa.gov.uk/ I do have to say however that if it turns out that this is something you do have to accept, then this should really show to you that it absolutely pays to read through your policy wording/policy quote when it's first received - not when you make a claim.

EDIT
____
In response to the person who gave me a thumbs down, please read the following:

Case Study (taken from the Express on Sunday, 29thMay 2005)
Jean and Myke Huggon were forced to move into rented accommodation when their home was flooded in January 2005. They had their contents insurance with MORE TH>N. Myke said, - The insurers were fantastic by sending people to see us and help with our claim.â€œ The contents insurance claim resulted in a Â£7,000 cash payout and vouchers to replace items ruined in the flood.

I have no idea whether that anecdote is true but if so, it would seem that vouchers can be given out in the event of a claim and therefore I reiterate what I've suggested above: "My instinct is that I doubt this is something you have to accept unless it is detailed within the terms & conditions of your policy wording. I suggest you ask your broker for a copy of both your schedule and policy booklet and that you read through them. Do not accept the offer in the meantime until you have read through both and if you are pressed by the insurers state that you dispute the claim can be settled in this way and you won't formally accept the offer until you have looked into it further."

Don't like this... They are doing two things.... getting a lowest possible price on the items replaced via vouchers , asthe preferred firms will be the cheapest.. also stopping people cashing in and using the insurance money for other reasons... Not sure about the legality,, would have to study the documemts..to see if this is mentioned... Have had odd claims myself in the past but never run into this .. Have always had a cheque. Ok buildings insurance I don't see the money, as the insurance co. pays the bill to the contractors but that's OK.

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