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ombudsman news

issue 88

August/September 2010

disputes over the quality of repairs arranged as part of an insurance claim

Although many of the insurance complaints we see require us to resolve disputes about whether or not a claim should be paid, in a sizeable number of cases the actual payment of the claim is not at issue. The insurer has already agreed to pay - but a dispute has then arisen over the repair or restoration work authorised by the insurer, in connection with the claim.

This selection of recent case studies illustrates some of the insurance complaints we have dealt with recently where the consumer has been unhappy with the overall quality of such work - or with what they consider to be unreasonable delays in getting the work completed.

88/01
insurer held responsible for poor standard of cleaning and incomplete repairs after caravan was vandalised

When Mr and Mrs D went away for a few days they left their caravan parked in its normal spot, on the driveway immediately outside their house. When they returned home they found the caravan had been broken into and vandalised.

Soon after they reported the damage, their insurer arranged for one of its representatives to come and inspect the caravan. He then arranged for it to be taken away to be cleaned and repaired.

Mr and Mrs D were far from happy when the caravan was returned to them. They said that the interior had not been properly cleaned and that the damaged toilet had not been repaired.

Initially, the insurer insisted that all the required work had been carried out to a proper standard. Mr and Mrs D argued that this was not the case. Eventually, a couple of months later, the insurer sent its representative back to take another look.

The representative did not think the cleaning had been unsatisfactory in any respect. However, he agreed that the toilet had not been repaired. He said that if Mr and Mrs D were willing to arrange the necessary work themselves, the insurer would cover the cost. Otherwise, the caravan could be taken away again for the insurer to arrange the repairs. The representative also offered the couple £250 as compensation for the inconvenience they had been caused.

Unhappy that the representative had not agreed with them about the standard of cleaning, Mr and Mrs D raised this again with the insurer.

The insurer repeated its view that the cleaning had been completed to a good standard. It told Mr and Mrs D that 'this initial state of cleanliness had in all probability deteriorated', over the time the caravan had been back with them.

Mr and Mrs D told the insurer that the reason for the recent deterioration in the caravan's condition was that water had seeped in around some of the windows and caused damp patches. The couple said the water had got in because some of the rubber window seals had been removed by the cleaning firm appointed by the insurer to work on the caravan. Mr and Mrs D therefore thought the insurer should pay them an additional amount to compensate them for the damage this had caused.

The insurer refused to do this. It told the couple it had already 'fully met' its obligations under the policy terms and conditions. Mr and Mrs D then referred their complaint to us.

complaint not upheld
The insurer sent us photos of the interior of the caravan, taken by the cleaners immediately after they had finished work on it. We were satisfied from these photos that the cleaning had been carried out to a good standard.

Fortunately, the photos included some close-ups of the windows. These showed no signs that the window seals had been damaged or removed.

There was insufficient evidence to show that the damp patches that Mr and Mrs D reported had come about either as a result of vandalism or because of any failings on the part of the cleaners. And given the age of the vehicle, we thought it more likely that the patches resulted simply from normal wear and tear that, over the years, had made the caravan less watertight.

We did not uphold the complaint. We told Mr and Mrs D that we thought the insurer's offer of compensation for the delay in repairing the toilet was reasonable. But we did not agree with them that the cleaning had been sub-standard or that the cleaners had removed the window seals, leading to water damage.

We explained to Mr and Mrs D that it was important to distinguish between the types of damage that were and were not covered by their insurance. Damage such as that caused by whoever had broken in to their caravan was covered. But their insurance did not cover the kind of damage that occurs naturally over time, as a result of normal wear and tear and gradual depreciation.

88/02
consumer says that poor standard of repairs arranged by her insurer affected the sale price of her house

Miss G complained about the poor quality of repair work carried out on the roof of her house, after she put in a claim under her household insurance policy.

She had first realised there was a problem with the roof when damp patches began to appear on her bedroom ceiling, after a period of particularly bad weather. The insurer's loss adjuster visited the house and agreed to cover the cost of repairs.

Miss G said that even before the work was completed, she had concerns about the contractors sent by her insurer to carry out the work. Once the work was finished, she told the insurer she thought the standard of workmanship was poor.

The loss adjuster visited the house and authorised remedial work by different contractors. But Miss G remained unhappy even after this further work was completed. On several further occasions she complained to the insurer. Each time it sent its loss adjuster to inspect the roof - and he then authorised further remedial work.

Eventually, Miss G sold her house. She then complained to the insurer that the poor quality of the repairs had forced her to accept a lower price than she would otherwise have been able to obtain.

The insurer did not accept that her complaint was justified, so Miss G came to us.

complaint upheld in part
The insurer sent us a report prepared by its loss adjuster, following the final set of repairs.

After considering this, together with the evidence submitted by Miss G, we concluded that the repairs were eventually completed to a good standard. So we did not agree with Miss G that the quality of the repair work had adversely affected the value of her house.

However, it was clear that the initial repair work had been sub-standard. And we considered that Miss G had suffered significant delay and disruption before the work was finally completed properly. So we said the insurer should pay her £400, in recognition of this.

88/03
farmer complains of financial losses resulting from delay in getting his grain dryer repaired

A farmer, Mr M, contacted his insurer after his grain dryer was damaged. The insurer agreed to cover the cost of repairs and it authorised a mechanic, based in Mr M's nearest town, to carry out the work.

Unfortunately, the mechanic experienced problems obtaining the parts needed to complete the repair. He therefore carried out a temporary 'fix', so that Mr M would be able to continue using the machine until the parts became available and a more permanent repair could be carried out.

The machine was finally repaired a few months later and Mr M was happy with the standard of work. However, he complained to the insurer that he had lost out financially because of the length of time it had taken to get his machine fully repaired.

He said the delay had meant he was late in selling his crop. He had been obliged to pay for the grain to be stored in the interim. And he had then been unable to get as high a price for it as he would normally have received. He therefore wanted the insurer to pay his storage costs and compensate him for loss of income. When the insurer refused to do this, Mr M came to us.

complaint not upheld
We noted that it took almost six months from when Mr M first reported the damage until his grain dryer was fully repaired. However, there was clear evidence to show that the delay related solely to the sourcing of the necessary parts. There was nothing to suggest that either the insurer or the mechanic had directly contributed to any delay.

Mr M sent us information to back up his claim that he had lost out financially. This included details of the varying prices he could have expected to receive for his crop, depending on when he sold it.

Mr M told us that if it had not been for the problems with his grain dryer, he would have sold his crop at his 'usual' time, when it would have commanded a higher price. However, he was unable to provide any evidence to show that he had always been in a position - in previous years - to sell at a time when he was likely to get the best price.

After examining all the available evidence, we concluded that Mr M had received a reasonable price for his crop. We thought he had been somewhat selective in deciding, with hindsight, exactly when he would have sold his grain if his dryer had been fully functional.

It was clear that the mechanic had taken all reasonable steps to obtain the necessary parts as quickly as possible. And by acting promptly to carry out a temporary repair, he had enabled Mr M to continue using his machine until the parts became available.

We did not think the insurer could reasonably be held responsible for the delay in repairing the machine, nor did we agree that it should reimburse Mr M's storage costs. We did not uphold the complaint.

88/04
consumer complains about delays in remedying defects in his newly-built house

Mr T's newly-built house was protected by a warranty. This provided cover if a building defect arose during the first 10 years after the property was built.

Almost from the day he moved in, Mr T experienced problems with the heating and plumbing. He reported these problems to the builder, in accordance with the terms of the warranty. However, the builder failed to resolve the problems adequately within two years, so responsibility for the work then passed to the insurer.

It was a further year before the problems were eventually resolved. The first contractor hired by the insurer failed to complete the work properly. After Mr T complained about this, the insurer asked an independent expert to produce a report. This concluded that the original heating system had not been 'fit for purpose' and that neither the initial remedial work undertaken by the builder, nor the work done subsequently, had addressed this.

When the problems were finally put right, Mr T complained to his insurer about the length of time it had taken, the amount of disruption caused, and the fact that he and his young family had been without adequate heating for most of this period.

The insurer accepted that Mr M had suffered some inconvenience and it offered him £500 in recognition of this. Mr M argued that, in the circumstances, the insurer should pay more. Unable to reach agreement, Mr T then referred the matter to us.

complaint upheld
Because the builder had failed to carry out effective repairs within two years, the insurer had then become liable for the work needed to put right the problems Mr T had reported.

The insurer's original contractor failed to identify the underlying problem and, in our view, the insurer had failed to progress matters with sufficient speed. As a result, Mr T had been put to a considerable amount of inconvenience and had been left with inadequate heating for an unreasonably lengthy period of time.

We therefore upheld the complaint. We told the insurer that its offer of compensation was too low - and that it should pay Mr T a further £750.

88/05
consumer complains when asked to pay installation costs for replacement of defective furniture, covered by warranty

When Mrs C bought a new bedroom suite she decided to buy a warranty as well, giving her insurance cover for the furniture. Around eighteen months later she noticed that the veneer on one of the fitted wardrobes had begun to lift, so she put in a claim under the warranty.

She was very disappointed when the insurer told her that the wardrobe could not be repaired. When she asked if the wardrobe could be replaced, the insurer told her the particular style she had bought was no longer available.

After some negotiation, the insurer eventually agreed to replace the entire bedroom suite. However, it told Mrs C that she would have to pay approximately £500 to cover the cost of fitting the new furniture.

Mrs C did not think this was fair. She said she had already paid once to have the furniture fitted. She did not see why she should pay again - particularly as it was not her fault that the entire suite needed to be replaced.

After further negotiations, the insurer agreed to meet half the costs of fitting the furniture but it refused to pay more than this. Mrs C then referred the dispute to us.

complaint not upheld
We looked carefully at the terms and conditions of the warranty. These clearly stated that if a replacement item of furniture could not be sourced, the insurer would be liable only for the cost of obtaining a replacement item. The policy expressly excluded 'any costs associated with re-installing a replacement product'.

So we explained to Mrs C that we were unable to uphold her complaint. The policy document, given to her when she bought the warranty, set out the terms and conditions very clearly. Under these terms and conditions, the insurer was not required to pay any of the installation costs for the replacement furniture. So we said the insurer had treated her more than fairly in offering to pay half of the costs.

88/06
dispute over failure of insurer's contractors to re-lay wooden floor satisfactorily after floodwater damage

Mr A submitted a claim under his household insurance policy when floodwater seriously damaged the wooden flooring in his family home. The flooring had been laid only 18 months earlier and covered the entire ground-floor.

In due course the insurer appointed a contractor to re-lay the floor. However, several months later Mr A contacted the insurer to complain that the floor had begun to distort in places.

After sending a representative to inspect the floor, the insurer accepted that the quality of its contractor's work had been unsatisfactory. It arranged for a different contractor to re-lay the floor but after only a short time, the floor began to distort again.

This time, after sending its inspector to examine the flooring, the insurer told Mr A that it was unable to take any further action. It said the problems resulted from 'seasonal movement.'

Mr A then complained to us. He said he was unhappy overall with the standard of service provided by his insurer. And he said there had never been any problems with the original wooden flooring. He thought the subsequent problems remained the responsibility of the insurer - which had twice sent insufficiently-skilled contractors to re-lay the floor.

complaint upheld
The insurer was unable to provide any evidence to support its claim that the problems were caused by 'seasonal movement.' And, unlike the firm that Mr A had engaged to lay the original flooring, neither of the contractors subsequently employed by the insurer were specialists in laying wooden flooring.

The insurer had accepted that sub-standard workmanship caused the problems reported by Mr A after the floor was re-laid for the first time. Very similar problems had occurred after the second contractor re-laid the floor. In the absence of any evidence to the contrary, we thought it reasonable to assume that these problems also related to poor workmanship.

We upheld the complaint. We said that Mr A should appoint a suitably experienced flooring contractor to carry out the necessary remedial work. We told the insurer to cover that contractor's costs in full. We said it should also pay Mr A £350 to compensate him for the disruption and delay he and his family had experienced while pursuing the claim.

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ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.