This month Paul Robertson kindly reproduces some extracts from his book looking at how the policyholder can make a complaint if they are unhappy with the way an insurance claim is handled.
The theme this month is complaints and I have chosen to reproduce a few edited extracts from my book – Robertson’s insurance principles for leasehold flats that may be of interest. In chapter seventeen I comment:
Making a complaint
If an insurer fails to settle a claim to the policyholder’s satisfaction, then the policyholder is quite rightly entitled to complain. An insurance policy will specifically contain a complaints process in the policy wording and you can expect this to consist of three parts:
First, the complaints procedure will require you to complain to your normal insurance provider. As a property manager that is probably you, as you will be the regulated firm considered to have sold the policy. In which case you will follow your own firm’s complaints procedure, acknowledge the complaint in the prescribed format and escalate it appropriately via your insurance broker. If you are company secretary then you probably will have made the complaint in the guise of client to your insurance broker.
In the event that the claim is not resolved to the policyholder’s satisfaction their next action, as defined by the policy wording, is likely to be to write a letter of complaint to the insurer. The policy wording will specify who this is to be directed to (commonly the chief executive) and the address to which to write. If making a complaint at this level it is best practice to clearly lay out the exact nature of the complaint and the action required to resolve it. Any such complaint will receive a formal acknowledgement, outlining a summary of the complaint and the proposed actions and time scales to address it.
If the policyholder is an eligible complainant (refer to Chapter 2, consumer protection for an explanation of eligibility) then they can complain to the Financial Ombudsman Service (FOS). Any decision by the FOS is binding by the insurer but does not prohibit the policyholder from taking further legal action. Only the policyholder can lodge a complaint with the FOS, so unless a lessee is named as joint insured they are not eligible to complain directly to the FOS.
Rights of compensation
Historically, policyholders, or for that matter lessees, had no defined rights of compensation against an insurer for failing to handle a claim promptly. In the case of block of flats insurance, insurers normally had some incentive to resolve large claims promptly as typically their costs for alternative accommodation and/or loss of rent could be exaggerated by a slow response.
The passing of The Enterprise Act 2016 which came into force for any policy incepting or renewing from 4 May 2016, means that the policyholder now has a right to claim compensation for any losses incurred as a result of the insurer’s failure to settle the claim promptly. The act however allows insurers a reasonable time to assess and investigate the claim and allows reasonableness for the size and type of claim as well as external influences that may delay the claim.
This all has yet to be tested – and in respect of block of flats insurance it is unclear what this will mean. However it is fair to assume that property managers that cause claims to be delayed will not be favoured by insurers.
If you want to understand the subject better then you may wish to consider reading my book – Robertson’s insurance principles for leasehold flats. It is now in print and available to order at www.1stsureflats.com/book-release
Paul Robertson, Managing Director
1st Sure Flats and Midway Insurance / Email: [email protected] / Tel: 0345 370 2848 / www.1stsureflats.com
