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Russell Reeves of Thrings explains how to dispute a denied insurance claim.
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Q. We had an insurance claim three years ago for storm damage to two hangars – one partially collapsed and structurally damaged and the other suddenly dangerously close to collapse. The only safe option was to tear them down and rebuild them.
The adjusters condemned everything, saying that it was lack of maintenance that the sheds were in the state they were. However, this is not correct. We are confident that we are entitled to our insurance money and welcome any advice you can give.
A: Your contract with the insurance company will govern your relationship and the rules that apply to your claim.
Therefore, you will need to check the specific terms of your insurance to judge whether the insurance company acted legally in denying the claim.
Your contract will be subject to certain limitations under general contract law and insurance regulation.
Legal obligations will also be imposed on you, for example, the duty of the utmost good faith to provide honest and accurate information.
By checking your contract, you may find a clause that imposes an obligation to maintain your buildings in good condition.
If this condition is in your contract, the insurance company may be legally entitled to deny coverage on this basis.
However, it sounds like you think the insurance company can rely on that term without any real merit.
The first thing I would suggest (if you haven’t already) is to write to the insurer stating that the buildings were in good condition.
Any supporting evidence such as photographs or material receipts will be helpful.
This would probably amount to a complaint within their internal system to challenge this decision in the first instance.
You may dispute the adjusters’ conclusion, especially how they were able to decide that the buildings were in poor condition after the storm damage.
You can ask your own surveyor to offer an alternative opinion, although this will cost you money.
You may not think this is necessary in the circumstances, or at least not until you have received an initial response to your complaint.
If you cannot come to an agreement directly with the insurer, you can complain to the Financial Ombudsman, who helps individuals and small businesses deal with such complaints.
It will be cheaper than going to court and has a good chance of settling the dispute.
If there’s still no agreement, you might consider suing the insurer for breach of contract.
You will want to check your contract in detail and highlight the terms that the insurance company violated by refusing to pay.
You will also want to make sure that you have complied with all the conditions of the insurance. Additionally, you should check for any dispute resolution clauses that may govern how you take legal action.
Some contracts restrict your right to sue.
It is important to meet deadlines. There may be a delay in contacting the ombudsman indicated in a letter you receive from the insurance company.
However, even if you have missed the deadline, the ombudsman can still review your case.
If you want to sue, you must file a claim within six years from the date of the breach of contract.
If you need to pursue a claim, the first step is to send a pre-action letter.
This is an important part of pre-action correspondence that will open a dialogue between you and the insurer to settle the dispute.
You can even reach an agreement before the need to appear in court arises.
A lawyer can help you write this letter.
Given the complex nature of insurance disputes, I recommend that you seek legal advice to help you choose the right course of action.
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