Understanding insurance claims

If you have reason to make a claim, you should notify the insurance company as soon as possible. There will usually be a clause in the policy document which requires you to do this as soon as is practically possible. If you have been burgled, obviously you will need to notify the police ahead of your insurance company.

For any major claim (different companies have their own internal guidelines), the insurance company will send a loss adjuster round to assess whether you are in compliance with the terms of your policy. They will check that all the details you provided and that you have not done anything that puts you in breach of the terms of your policy.

One of the reasons that the insurance industry has had bad press over the years is because of grievances over occasions when they have not paid out. Many people live, apparently safe in the knowledge that their home is insured against all manner of catastrophe, only to find that they are left with next to nothing when disaster strikes.

There are two lesson to be learned from this:

• Never tell insurance companies something that is inaccurate or false.
  
• Always read the small print.

Contained within the detailed policy document is an array of exclusions - special circumstances or events where you insurance cover will not be of use to you. Some of the more common ones are listed below, but you should always check the individual policy details:

Failure to provide accurate information. Aside from anything else, you run the risk of being prosecuted for fraud if it is found that you deliberately falsified your claim details.

Failure to install or correctly use the door and window locks, burglar alarm, or other security system.

Any repair work that is caused by lack of maintenance or negligence will almost certainly not be covered. If you let your home go to rack and ruin - never service the plumbing and boiler, forget to ever clean out the gutters, or neglect to replace roof tiles lost in a storm - then the insurance company is unlikely to foot the bill for any major work that arises as a result of your lack of action.
If your home suffers further damage as a result of you failing to carry out proper repair work on the original problem, then you will find it difficult to convince the insurance company of their obligation to pay for the work.

Buildings insurance does not usually cover damage to fences, walls, gates, or hedges for damage caused by storms or inclement weather. You may possibly be able to claim if someone comes and steals all your fences, but you almost never be covered if they are blown away in a hurricane.

Similarly, your garden furniture may be covered if it is stored in a shed that is secured with an approved lock, but you are unlikely to get a payout if it is left on the patio.

Finally, bear in mind that sometimes it is not worth replacing possessions or doing repair work using the insurance. If it will cost less than or not too much higher than the excess then the loss of no-claims discounts may make it worthwhile paying for some things out of your own pocket.