Home Insurance Customers Short-Changed by Meagre Cash Settlements

If you had to make a claim on your home insurance, you shouldn’t be naive to think that your insurer would pay out as much as it takes to fix the damage. Unfortunately, this is not always the case. We’ve all heard horror stories about how inadequate settlements have forced homeowners to cover the cost of damage themselves – which can often amount to tens of thousands of pounds.

In this article we’ll discuss cash settlements and explore why so many claimants end up with inadequate payouts.

It’s important to be aware of the difference between a Loss Assessor and a Loss Adjuster, as although these professionals work in the same industry, their roles are very different. A Loss Assessor is a professional who you have the right to appoint to be on your side throughout the claim process and obtain the full and fair settlement you deserve. On the other hand, a Loss Adjuster is someone appointed by your insurance company. Their job is to assess the extent of the damage suffered and works in the interests of your insurer.

Between May and September 2023, consumer group Which? spoke with 10 claimants in ongoing claims disputes with insurers, and also to 10 claims professionals. Most of the experts spoken to by Which?- the majority of whom were Loss Assessors – stated that inadequate cash settlements were a major and deep-rooted problem within the insurance industry. For five of the claimants Which? spoke to, differences in opinion around appropriate settlement amounts formed a key, ongoing part of the dispute. In one case, a Loss Assessor was able to push the settlement for their client from £60,000 to £250,000! It’s worrying to think what the outcome could have been if this claimant didn’t have a Loss Assessor on their side.

What is most surprising about this survey was that some of those questioned by Which? had previously worked as Loss Adjusters. The very notion that those on the other side of the fence also recognise the failure to adequately pay out as a systemic issue in the industry highlights the true extent of the problem.

Cash settlements are at the heart of many disputes between insurers and claimants. 

When you make a property insurance claim, your insurer will settle it by agreeing to repair the damage or by offering a cash settlement. If you opt for a cash settlement, your insurer only has to offer you the amount it would cost for their contractors to do the work. Insurers often benefit from discounted rates from the supplies and contractors they work with, so your cash settlement may not cover the cost of repairing the damage. However, if the insurer insists on a cash settlement and refuses to do the works, they should pay you what it will cost you to carry out the works. 

Director of Property Claim Assist, and Loss Assessor of over 15 years Simon Colburn states that: “Many claimants are having to wait months or even years for their property insurance claim to be resolved with unreasonable delays caused by insurers to blame. With the cost of living crisis still ongoing, it’s possible that in this time, the cost of materials and contractors will also rise, meaning that the original cash settlement isn’t enough to cover these additional costs. Claimants need to exercise extra caution when accepting cash settlements to ensure they have enough money to successfully complete all damage.”

If you feel your insurer is treating you unfairly, you are well within your rights to write a letter of complaint. This task can be daunting to anyone, especially while trying to recover from property damage. If you’re feeling overwhelmed, we highly recommend that you get in touch with a Loss Assessor like Property Claim Assist, who understands the claim process inside out. They will evaluate your case and work in your interests to obtain the full and fair settlement you deserve.

If you’re facing a claim delay and need advice, speak directly with a Loss Assessor today by calling 0333 577 2720.