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Nic Cicutti: So insurers wonder why the public doesn’t trust them?


Regular readers of this column will know that, apart from occasional asides about TV programmes, books I may have read or references to an abiding passion for Italian scooters, I don’t often write about my own financial problems in any great detail.

Generally, my view is that while it may be appropriate to refer to personal financial dilemmas in the context of a wider debate about topics relevant to IFAs, washing one’s financial linen in public is usually a step too far.

I hope, however, to be granted a small indulgence this week, if only because my experience over the past few months may offer an insight into how the financial services industry treats the general public.

In my case, the issue is with my general insurer. As I’ve indicated before, a fire at our thatched cottage in December last year gutted the property although the four walls were left standing.

The insurer, Ageas, accepted liability for the damage and we started planning for the rebuild.

Clearly, a key issue was whether we were fully insured. If we weren’t, Ageas might seek to impose “averaging”, reducing any sum available for the restoration by a percentage equal to the amount we were under-insured by.

Luckily for us, the company’s loss adjuster informed me that, having considered the issue carefully, he felt we were not underinsured to the point where averaging might be required. Armed with this information, which I wrote about in a national newspaper and which has never been repudiated by the insurer, we set about the process of putting the work out to tender.

At this point, the first bombshell: after weeks of delays by Ageas, the adjuster informed us he wanted to impose a £100,000 deduction from the sum insured to reflect the fact that the cottage’s four walls were still standing.

There is no reference in the policy, or in any other document supplied to us by our insurer, that distinguishes between the amount payable for a full rebuild of the property and its partial refurbishment.

Apart from anything else, to introduce any such limit would allow the insurer potentially to walk away from meeting the costs of a full refurbishment of a property where a ground-up rebuild is not required.

This is because in some cases the cost of a full restoration/refurbishment, while still below the sum insured, can be higher than a full rebuild, if only because VAT is not reclaimable. Plus, some costs in a partial restoration, such as long-term scaffolding to protect the remaining structure, do not apply to a full rebuild.

I immediately wrote back to the adjuster making these points and saying we wanted a formal response from the insurer within eight weeks before considering whether to take the issue to the FOS.

Almost eight weeks in and no response has been received, which hopefully means that Ageas has abandoned that particular line.

If so, that would be a wise decision as a lawyer with long experience in insurance litigation told me last week its attempt to impose such a deduction has no legal basis. Either way, unless we hear from Ageas, we will refer it to the FOS ourselves.

Not that the company has stopped trying. Last week Ageas informed us it was prepared to accept the cheapest quote to refurbish our property – a quote that falls well within the maximum sum insured. We told the builder it was all systems go.

The sting in the tail came days later when the adjuster sent us a letter offering a cash settlement but without any contingency in the event of potential rebuild problems. Ageas previously told us it had concerns about the absence of a contingency in the builder’s quote. No longer, it seems.

If we don’t accept, the adjuster informed us that Ageas might impose “averaging” on the rebuild process after all – having said we were not under-insured just six months ago.

This, potentially, is what is known as “estoppel by representation”, where we entered into a contract having relied on an earlier statement by the insurer which it made no attempt to correct, despite having repeated opportunities to do so.

The lawyer I spoke to tells me Ageas’ tactics are common within the industry. 

The hope is that if the claimant is a mug, he or she will give in. The point in telling this story is not to seek sympathy from readers, quite the reverse. I have a reasonable understanding of home insurance processes and know what steps to take next.

Ironically, Ageas and my loss adjuster are aware of this. Yet they are still working hard to chip away at what we are entitled to despite knowing that of all the people to pick a fight with, I’m definitely not that person.

Which makes me wonder how insurers treat the hundreds of thousands of less experienced policyholders who are unfortunate enough to claim under their contracts.

As I have argued before, IFAs are among the least blameworthy of all groups operating within the financial services industry but they end up tainted by those with whom consumers are more likely to come into contact with on a regular basis.

Insurers, meanwhile, wonder why the public don’t trust them. It’s not hard to see why.

Nic Cicutti can be contacted at



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There are 8 comments at the moment, we would love to hear your opinion too.

  1. good day for golf 29th May 2014 at 10:05 am

    Insurance companies are necessary evil to be treated as such.

    If you think they are bad when it comes to insurance you should look at their history on investment 🙂

  2. good day for golf 29th May 2014 at 10:36 am

    What the Insurance ads say and what happens on claim are very different issues

    Bit like the advert for latest jobs to the right on this page

    “basic plus commission overseas or commission only”

    Doesn’t take an Einstein if you have been in the industry a while
    to realise the only offering you will be given is commission only

    Yanks call it ‘bait and switch’ bait being the basic salary which is about as rare as – well it aint gonna happen. Because funnily enough the paymasters in all those overseas jobs are guess who? Yep – insurance companies selling their misnamed investment plans which are money pits to you and me.

    So all roads lead back to the insurance company- nice group- not.

  3. Oh Nic, Nic!!

    I never took you to be the naïve or trusting type. You know full well my view of all insurers and assurers. We’ll take your money (as much as we can get away with), but if you claim we will do our best to repudiate or chop you down. Indeed your lawyer has told you as much.

    Ages is part of the Fortis group (as I’m sure you know) and while they are big are not terribly well known. They trend to white label for Tesco, Rias and others. Therefore unlike other more recognisable household names they have a little less to lose by being bastards.

    You are not alone, or unique. It happens to everyone. There is always a reason. They will find one. Thankfully you won’t take this lying down and will fight. But many don’t or can’t.

    Also you may wish to ponder on the relationship between ‘independent’ adjusters and the insurance company that pays their wages. You may like to investigate whether their fee is enhanced by the amount they are seen to save the insurer, rather than just receive a flat fee – irrespective of claim size or outcome.

    Sometimes the engagement of an assessor is worth the cost as the aggro factor is somewhat reduced.

  4. Ex Broker Consultant 29th May 2014 at 1:35 pm

    Wow a piece by Nic I can agree with.

    Yep loss adjusters are there to reduce the loss to the company not the insured no matter what they say.

  5. At one stage in my career I was what was know as a “Composite Inspector”-I dealt with general insurance as well as life/pensions and my role included settling smaller claims.
    I will always remember a senior figure in the head office claims department passing the comment (as near as I can remember it) “..if someone writes in to you and thanks you for settling his/her claim in a satisfactory manner then you have done it wrong. A policyholder who tells us he is reluctantly accepting our offer despite the fact that he thinks we are not paying him the full amount he is entitled to, that tells you you’ve done it right”. Seems like attitudes have not changed much.
    Nauseating isn’t it?

  6. Have never ever believed loss adjusters are “independent” I used to work as a general insurance broker consultant, remember those? Loss adjusters were used for larger claims, trouble is there were several different firms so if one did not save enough money referrals were likely to dry up.
    When the insurance company is paying the loss adjuster how can they possibly be independent? at least that’s what the FCA say about IFA’s, so perhaps they should be looking at this.

    Of course Nic you can always employ your own independent insurance assessor to fight for you, but I suspect you know enough about the business not to need one, although sometimes they come up with items you can claim about and may not have realised.

    Good luck Nic, This sounds as if it may be long fight, but don’t let the B******* grind you down.

  7. Oh the irony…. whilst I do have my sympathy for his situation, what is playing out is just like any IFA trying to deal with the FCA.
    You know you have the law, the right and the morals on your side, BUT MIGHT IS RIGHT.
    Good on you for sticking up, but that is EXACTLY what some of us are doing with the FCA with regard their arrogance over the right to a longstop (moral, common sense and legal too I believe). I don’t argue the issue of a 15 year longstop, I argue the issue of infinite liability being a moral corruption.

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