Policy clause interpretation

isnottheword

See excerpt from insurance policy below. The ins. company are suggesting that my carpet is not covered as it 'wasn't part o the original specification'.


'The cost of complete or partial rebuilding or rectifying work to the Housing Unit which has been affected by Major Damage provided always that the liability of the Underwriter does not exceed the reasonable cost of rebuilding each Housing Unit to its original specification.'


The damage to the carpet came about as a direct result of the issue that arose (for which they take full responsibility). My take on the above is that it's included as a single item - within the scope of works; that it's not going to mean that the OVERALL cost with regard to rebuild of the dwelling (as per original specification) is not going to be exceeded.

How do you all interpret the clause as written above?

coylemj

How does the insurance company purport to know what style of carpet was included in the 'original specification'?

New houses typically don't come with carpets and secondhand houses are usually sold with carpets 'as is' with no documented 'specification'.

What type of premises is this?

isnottheword

They're talking in terms of 'its original specification' insofar as when the house (a semi-d) was taken ownership of (by me), the 'original specification' did not include carpet...which is true.

My argument is one of interpretation of the clause. Does that clause not deal with overall costs i.e. total costs of a full rebuild are not to exceed the original specification of the house??? ...rather than referring to this specific item?

Now, it's not a full rebuild that's required - albeit that it does involve pretty significant costs. Furthermore, there is no question but that the carpet has been damaged as a direct consequence of 'major damage' (for which they are liable for - and have accepted full responsibility for).

Nody

I'd read it as carpets are X years old; new carpet cost is Y EUR and they then deduct Z EUR for age of carpet to get to the value you'd get to replace them and you get to fill in the gap so to speak.

daheff

would carpets not come under contents?

coylemj

isnottheword wrote: »

They're talking in terms of 'its original specification' insofar as when the house (a semi-d) was taken ownership of (by me), the 'original specification' did not include carpet...which is true.

Two questions for you....

1. Do you have the building and contents insured with the same company?

2. Did you have the place insured for an amount which would cover full rebuild? I know that this isn't a full rebuild but if you haven't valued the place to cover a full rebuild, they will apply a % deduction even to claims that involve partial rebuild and refurbishment.

If the insurance is all with the same company and you have the right level of cover (in terms of stated value for rebuild), there is no reason why you wouldn't been entitled to a payout for the carpet damage.

The issue with insurance is not what was in your house when you bought it, its that your current policy covers up to the potential replacement cost in the event of total destruction by fire or other catastrophe.

Their logic says that if my house is 50 years old and I suffer severe smoke damage, they will only give me the price of a 21" black & white TV to replace my 48" LCD! Are you dealing with an Irish insurance company?

isnottheword

My bad on this - I should have clarified. This isn't 'home' insurance - it's structural insurance.

coylemj

isnottheword wrote: »

My bad on this - I should have clarified. This isn't 'home' insurance - it's structural insurance.

I knew this wasn't a basic home+contents situation.

So...... I think you'll struggle to claim that carpets constitute part of the 'structure' of your building.

isnottheword

coylemj wrote: »

So...... I think you'll struggle to claim that carpets constitute part of the 'structure' of your building.

I agree completely. However, this is all very circumstantial.

The fact of the matter is that the carpets were damaged as a direct result of their negligence (for which they admit responisibility). They are not disputing that they are damaged or the reason for them being damaged.

coylemj

isnottheword wrote: »

I agree completely. However, this is all very circumstantial.

The fact of the matter is that the carpets were damaged as a direct result of their negligence (for which they admit responisibility). They are not disputing that they are damaged or the reason for them being damaged.

Then you need to look into taking a civil claim rather than one under an insurance policy. I think you need to talk to a solicitor.

isnottheword

coylemj wrote: »

Then you need to look into taking a civil claim rather than one under an insurance policy. I think you need to talk to a solicitor.

Yep.....already in train..will be up to speed on that within 2 weeks or so.

Sue Pa Key Pa

Carpets are defined as Contents and do not come under the cover provided by structural/buildings insurance policies. Negligence is not bound by the terms of the contract. Who or what was the source of the negligence?

alig123aileen

I think you need to incorporate all the excellent points made above and WRITE to the insurer and say you intend to bring a claim to the Financial Regulator unless the cost of your carpets are included. Use your own great point as the main argument. Ask for a sign off letter (insurer will be familiar with this its a letter you need to bring your case to the ombudsman) stating their final position. I think you will find that will concentrate their minds very quickly and you will get what you are looking for. You must put this in writing a phone call will not suffice. If you decide to do this please post here as I am interested on the outcome. All insurers now try to get away with what they can on the basis of the customers lack of knowledge so fair play asking for the terms and conditions.


See excerpt from insurance policy below.

'The cost of complete or partial rebuilding or rectifying work to the Housing Unit which has been affected by Major Damage provided always that the liability of the Underwriter does not exceed the reasonable cost of rebuilding each Housing Unit to its original specification.'


The damage to the carpet came about as a direct result of the issue that arose (for which they take full responsibility). My take on the above is that it's included as a single item - within the scope of works; that it's not going to mean that the OVERALL cost with regard to rebuild of the dwelling (as per original specification) is not going to be exceeded.

Sue Pa Key Pa

The word 'liable' is being tossed about and needs to be put into the correct context. Can you tell me what the cause of the loss is? (fire, storm, burst pipe etc.) or has somebody caused you a loss because of their negligence?

coylemj

Sue Pa Key Pa wrote: »

The word 'liable' is being tossed about and needs to be put into the correct context. Can you tell me what the cause of the loss is? (fire, storm, burst pipe etc.) or has somebody caused you a loss because of their negligence?

Yes, see the OP's post (#9) above.

Sue Pa Key Pa

coylemj wrote: »

Yes, see the OP's post (#9) above.

But the way that is phrased, to my eye, is that the OP is referring to the insurance company as being negligent. I'm trying to get the specific incident that occurred

isnottheword

Sue Pa ...

Dampness coming through the walls due to structural issue with roof barge.

I'd imagine you'll say that's the builders negligence and the insurer only insure the risk or some such? The builder no longer exists - so that leaves responsibility with the insurer.

If you say that's not negligence, then I won't argue with you. I can't profess to have the knowledge on this sort of thing. I will be running it by a solicitor within the next 10 days or so (along with a couple of other queries) so once I have a definitive legal interpretation on that (and the other matters), then I'll be happy enough to proceed on that basis.

Sue Pa Key Pa

Seriously, I only asked for the circumstances so I could advise you properly. You never said it was a structural guarantee scenario, it could have been a standard household policy you were enquiring about. The approach is different for each

bmwguy

OP on the face of it you have a valid argument definitely worth exploring. Lack of structural integrity caused you suffer a financial loss, but the key is in the wording and interpretation.

We will all interpret it differently here and it's all moot really. Doesn't matter about our interpretation let your solicitor thrash it out. Tricky business trying to get insurers to pay out on grey areas

isnottheword

Sue Pa - you're quite right - I didn't clarify structural ins. until a few posts in - mea culpa on that one for sure.

Do you still think it's out of scope from an insurance point of view or there's a possibility that a justification can be made for it's inclusion?

As said, I will eventually get this thrashed out with a solicitor - but no harm to discuss it and get peoples views.

Sue Pa Key Pa

My opinion would be that the insurer holds a policy which rectifies structural defects caused by their member builder. The cover limits their exposure to restoring the property to the correct specification.

However, you suffered additional loss directly from the defect and that is where liability comes in to it. If the builder did not construct the property with the appropriate level of professionalism, he would be negligent and that is where your remedy lies. The builder may be gone but it is possible that he had "run-off" cover under a professional indemnity policy, which looks after incidents like this which come to light years after the event.

Again, just my opinion, but the builder was negligent, not the insurer. But the insurer has issued a policy to compensate those who suffer loss, but they can apply terms, conditions & limitations.

Best of luck

peteb2

alig123aileen wrote:

I think you need to incorporate all the excellent points made above and WRITE to the insurer and say you intend to bring a claim to the Financial Regulator unless the cost of your carpets are included. Use your own great point as the main argument. Ask for a sign off letter (insurer will be familiar with this its a letter you need to bring your case to the ombudsman) stating their final position. I think you will find that will concentrate their minds very quickly and you will get what you are looking for. You must put this in writing a phone call will not suffice. If you decide to do this please post here as I am interested on the outcome. All insurers now try to get away with what they can on the basis of the customers lack of knowledge so fair play asking for the terms and conditions.

Fso doesn't get involved in claims. That is what the arbitration clause of a policy is for.

isnottheword

peteb2 wrote: »

Fso doesn't get involved in claims. That is what the arbitration clause of a policy is for.

Arbitration clause phrased as follows;

"If any difference shall arise as to the amount to be paid under this Policy (liability being otherwise admitted)such difference shall be referred to an arbitrator to be appointed by the parties in accordance with the statutory provisions then in force".

A question in that regard - does this clause become relevant only where there is a difference in the $ value accredited to the works to be carried out? Is it relevant in a scenario where liability has been admitted - but there is a difference of opinion between parties as to the extent of that liability?


I should have a legal interpretation of that in the coming days but if anyone would like to take a stab at it with their understanding of the above, please post below.