...AND STORM COVER CAN BE JUST AS RISKY
WHEN Michael Collins heard a loud crash upstairs while in his sitting room, he thought it was thunder.
At the time, the tail-end of Hurricane Lorenzo was heading for Britain, and there were severe weather warnings in place all over the country.
But when the part-time chess teacher from Beckenham in Kent went to check, he found that the ceiling of his guest bedroom had collapsed, leaving a 6ft hole.
Michael, 70, reported the damage to his insurer, Lloyds, but a month later it rejected his claim — because the wind speed in his area had been only 45 mph. It turns out that buried in the small print in his policy are strict requirements that must be met in order for a claim for structural damage after a storm to be successful.
There must have been ‘ strong winds with gusts of at least 55 mph’ or ‘ hail or snow of such intensity or weight that it causes damage to hard surfaces or breaks glass’. According to Lloyds’ surveyor, the damage was not caused by ‘a one-off storm event’ — it added that water had entered the property through a tear in the felt under the roof, where tiles had been replaced two years ago.
Michael, who paid Lloyds £344.46 in premiums last year, says: ‘ How can Lloyds say that Storm Lorenzo wasn’t a storm? I suspect I will have to take out an equity release loan to pay for the repairs, which could cost up to £12,000.’
In September, Money Mail revealed how soaring numbers of households are being forced to fight for a home insurance payout. In one case, a family had their claim for broken guttering rejected because the wind speed in their area had reached just 40 mph, not the required 47 mph.
The problem is that insurers have introduced a bewildering array of terms and conditions, and define ‘a storm’ differently as a result.
Ageas, Hastings, AXA, Co-op and Esure all demand the same minimum wind speed as Lloyds Bank, 55 mph. In addition, there are minimum rain and snowfall requirements that can be used to define a storm.
All five insurers will accept there has been a storm if at least 30cm of snow falls within 24 hours, or if hail is so intense that it causes damage to hard surfaces or breaks glass.
Ageas, Hastings and AXA will also accept that heavy rain is a storm if at least 25mm falls per hour; for Esure, it is 25mm in 24 hours.
Admiral demands a lower wind speed of at least 54 mph, but it does not define heavy rain alone as a storm; for Co-op, it’s 15mm of rain falling per hour.
From next year, Tesco Bank will define a storm as ‘a single violent weather event with wind speeds exceeding 47 mph’. It will also accept snowfall exceeding ‘ 30cm in depth within a 48-hour period’ and ‘torrential rainfall of at least 25mm per hour’.
Aviva defines a storm as: ‘ An unusual weather event with persistent high winds usually associated with rain, thunder, lightning or snow.’ It adds that wind or gust speeds ‘should normally exceed 55 mph’ to be a storm, but it would ‘take other factors into consideration’.
By comparison, LV=, Royal & Sun Alliance, Direct Line and Zurich do not have defined minimum wind speeds or rainfall measurements in their policies. All four say they consider claims on an individual basis. Admiral, AXA, Ageas, Tesco and Co- op say they may still consider a storm damage claim even if the weather falls outside their definition of a storm. Mike Wilson, of insurance claims specialist Flaxman Partners, says: ‘If insurers are going to use these minimum measurements to reject claims, they need to make this very clear to customers when they buy the policy.’ Customers can challenge a rejection with the Financial Ombudsman, which has ruled in favour of policyholders in such cases in the past. A Lloyds spokesperson says: ‘ Unfortunately, Mr Collins’ home insurance claim did not meet our storm criteria and it was rejected. A range of factors are taken into consideration, including wind speed.’ An Association of British Insurers spokesperson says: ‘Insurers will take into account various factors when assessing storm damage.’
SOMETIMES you just have to wonder how home insurers get away with it.
They lure you in with a cheap, loss-leading policy, jack up the price for anyone who stays loyal — and then use every trick in the book to wriggle out of paying claims.
Many homeowners go through their whole life without ever making a claim on their policy, preferring to cover the cost of any minor damage themselves to protect their no claims discount. So if they
put in a claim, it is typically because they have suffered a real disaster, such as a fire or flood or have been the victim of a crime.
But all too often, at a most stressful time, households find their insurance isn’t worth the paper it’s written on. After diligently paying premiums for decades, jargon buried in the small print means they are not eligible for help.
Take storm cover. As we reveal on Page 48, insurers use multiple definitions as to what qualifies as a storm. For some, it’s wind speeds of 47 mph; for others, 54 mph or even 55 mph. Some demand a minimum rainfall per hour, others per 24 hours — and this could be 15mm, 25mm or (if it’s snow) 30cm.
How on earth are we supposed to navigate this baffling maze?
If your home is struck by a stray branch during what anyone would describe as a storm, the exact wind speed shouldn’t matter.
A decent insurer should be able to use common sense when assessing your claim, rather than pointing to obscure terms and conditions. And if insurers insist on nit-picking, the least they can do is to use the same measurements so there is some consistency for customers.
Meanwhile, brokers or insurers selling policies without flood cover to homes in flood- risk areas, should take a long hard look in the mirror.
Online scandals
LAST week we revealed how customers are under increasing pressure to bank online, with NatWest now refusing to print paper statements in branch.
You responded in your droves, slamming the bank for failing the elderly, vulnerable and anyone else who may not be comfortable using computers.
Many also highlighted other examples where customers are penalised for not being online.
Trevor says: ‘I am due a tax rebate. Oddly it can be done in five working days if requested online but takes up to two months if not applied for online. Other examples include savings rates biased towards online accounts, some services charging extra if you don’t receive an e-bill.’
Susan says: ‘I recently tried to apply for a Blue Badge but you can now only apply online and must have an email address. Blue Badges are supposed to be about helping the most vulnerable people in society.’
I also received three notes about Sainsbury’s ‘double up’ Nectar point promotion. One reader says: ‘Every year I look forward to the Sainsbury’s double up promotion to stock up on wines for Christmas, but this year it has decided to make it online only and will not be issuing vouchers in store. For those of us without a smartphone or online access, this means we are excluded from the promotion.’
If you have ever lost out because you’re not online, write to me at the email below or Money Mail, 2 Derry Street, London W8 5TT.
TSB failure
A DAMNINg report into the IT meltdown at TSB last year has confirmed what we suspected all along: the bank utterly failed its customers.
Not testing its new system properly demonstrates extraordinary arrogance, and customers paid the price. They may have since been compensated, but there is no making up for the fact that the stress endured by many was avoidable.
How many computer disasters will there be before the regulator introduces tougher checks? The findings should act as a stark warning to other financial firms looking to upgrade systems.