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Insurance Claim Dispute

Summary: A pleasant night out turns into an insurance claim dispute nightmare.

Mr and Mrs W came home after a pleasant night out to find their home flooded. The cold water tank had burst and as a result several hundred litres of cold water had cascaded through the house causing tens of thousands of pounds of damage.

Mr W called the insurance company first thing in the morning but was told that no policy existed for his property. Somewhat perturbed, Mr W then called his insurance broker – who he had paid in full not many months previously – and was told that the director concerned who should have set up the policy had not done so. In fact, this individual had done similarly with a number of clients, having pocketed their money and disappeared.

So where did this leave Mr and Mrs W? All he and his wife wanted was to repair their home and restore it to its previous state. Not getting anywhere with either the sympathetic but financially strapped insurance broker or the insurance company, Mr W immediately appointed his own contractors and started proceedings against both the insurance company and the insurance broker.

Mediation proceedings were subsequently arranged and settlement quickly reached over apportioning responsibility. The insurance company, in particular, wanted to avoid the story getting into the national papers and this, it must be said, was the main driving force to their settlement. With regard to the insurance broker, this case highlighted the weak, almost non-existent, financial controls; the mediation helped address this issue to hopefully avoid any reoccurrence.