Friday 13th….unlucky for some

Friday 13th can, according to superstition, be unlucky for some.  Dishwasher fire

However, if you suffer damage to your property and need advice and assistance in negotiating your insurance claim, it could be your lucky day.

Balcombes have a team of qualified and experienced loss assessors who are able to fully assess your loss and damage within the terms of your insurance policy.  We are expert in insurance policy wordings and in processing property and business interruption insurance claims.  Let the experts take some of the stress and uncertainty out of your bad luck.  It pay’s to get expert help. 

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The Beast from the East

Ireland is experiencing a cold snap as polar air crosses from the East and meets with a moist air mass from Storm Emma from the South. This is resulting in significant snow falls and sub zero temperatures, as the Met Office issues a Status Red weather alert.

Prolonged freezing conditions can cause pipes to burst which will lead to extensive damage caused by escape of water.  This can be particularly so if a property is unattended when the thaw comes, leading to unlimited free flowing water.

Most insurance policies cover the damage caused by the escape of water from any fixed water apparatus, provided the property has not been left unattended for more than 30 days. Some policies exclude the cost of the plumbing repairs caused by wear and tear but will cover the subsequent water damage.  In a freeze-up, the ‘burst’ is a sudden and unforeseen event and therefore the plumbing repair cost would be covered on those policies. Check your policy wording for details or call us for advice.

It is vital to fully establish the extent of water damage, as it may not be immediately apparent.  Untreated timber combined with concealed water can lead to fungal mould growth and to dry rot at a later stage.  Professional advice and expert assessment can prevent these issues when it comes to ensuring you receive your rightful entitlement under the terms of your policy.

Call us on 1800 506 700

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Expert water detection, the key to success…

If you suffer water damage from a leaking pipe, how do you know what to claim for?

I have given up a long time ago trying to figure out the path that water flows.  Thankfully Balcombes loss assessors all carry a vital piece of expensive equipment that detects moisture content in wood, plaster or brick surfaces. 

That way we are able to tell where the water leak has penetrated and what is likely to need to be replaced and what needs to be removed to dry out or replace hidden damage.

What might look fine to the casual observer, may well be saturated and may only show signs of deterioration at a later stage, when it may be too late.  We can demonstrate to your insurer’s appointed loss adjuster or contractor, the evidence that forms the basis of your claim.

Our expert team of loss assessors can be your guarantee of a sucessful outcome to your property claim and we are there to give you personal service, expert opinions and peace of mind.

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Fire, Smoke or Water

People often ask “which causes the worst damage: fire, smoke or water?”

My answer is simple – they are all bad.  However, there is no fire without smoke, and usually when you have a fire there is water damage as well due to fire brigade extinguishers or water pipes melting and discharging water.

The devastation caused following a fire is not somethng I would wish on my worst enemy.  Smoke gets into everthing, and it often amazes people to see ‘smoke cobwebs’ everywhere following a fire.  Smoke deposits cling to cobwebs that would not normally be visible, but when they turn black they are very visible!  You can also open presses and move objects to see how much smoke got into the press. It permeates clothing, soft furnishings, carpets and blinds etc.  It even gets into PVC, plaster and woodwork.

A water leak on it’s own is probably the easist damage to deal with, and to repair.  It is also the most frequent loss type.  Insurers however have discriminated against people with water leaks by increasing the policy excess for water damage.   This adds hardship onto householders who have to factor in the impact of the excess and loss of no claims bonus, when considering whether it is worthwhile making a claim or not.

Thankfully though all damage can be repaired and with expert specialists with experience to recommend the right people to deal with the devastation, the damage can be quickly assessed, negotiated and restored.

For independent advice from experts on your side – talk to Balcombes on 1800506700

 

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Balcombes Mind Map

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Hurricane Ophelia – the aftermath

Our team of assessors are currently deployed across the country to deal with property damage claims.  We act on behalf of property owners to help them to recover from their loss and damage.  We compile full written claim details to support your claim submission, and we negotiate settlement under the terms of the policy.

photo courtesy of thejournal.ie

photo courtesy of thejournal.ie

Balcombes have advised policyholders to:

  1. Take photographs of the damage
  2. Secure the premises against further damage/effect temporary repairs.
  3. Report the claim to your Insurer.
  4. Remove wet or damage contents but do not dispose of them off site.
  5. Make an inventory of damaged items or appoint a Loss Assessor to handle the claim to ensure they receive their full entitlement under the terms of the policy.

Insurers will appoint Loss Adjusters or Builders to assess or repair the damage to buildings, but it is important to recognise that they are there to represent the Insurer and will not, for example, compile a claim for damaged contents.  Loss Assessors work for the Policyholder and will provide support and reassurance over the process, and the steps to take.  We are there to represent the property owner.  “People want to know where they stand.  It’s important that they have someone they can rely on the fully assess the damage on their behalf” said Jim Flannery, Director.  “With over 40 years experience dealing with storm damage claimants in Ireland, you can put your trust in us”.  Call us on 1800 506 700

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Property Claims – Know your rights

   If you suffer damage to your property and need to make an insurance claim the Central Bank’s Consumer Protection Code 2012 stipulates that if your insurer is appointing a Loss Adjuster to handle the claim on their behalf, they must inform that policyholder that the Loss Adjuster is there to represent the interests of the Insurer and that they (the policyholder) may appoint a Loss Assessor to represent their interests, but at their own expense.

It has become apparent in recent times that some insurers are trying to avoid compliance with this stipulation by appointing their own in-house loss adjusters or partner contractors to try and circumvent the rights of the consumer to engage a Loss Assessor.  KNOW YOUR RIGHTSUnfortunately Loss Assessors do not have  large marketing budgets to engage in a mass media campaign to advertise that fact. Perhaps the Financial Regulator should do so if they are serious about consumer protection.  In the meantime most of our business comes from referrals from insurance brokers, and from happy clients who know and appreciate the value we brought to their insurance claim solution. We thank you for your support.

Help us educate the public by spreading the word.  Please click the links below or “like” and “share” this post to circulate it with your network.

      We have first hand experience of settlement proposals or solutions being offered directly to policyholders, and when we were asked by them to review it there were serious deficiencies in what was being proposed.

     Our initial consultation is free of charge.  Call us on 1800 506 700.

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Fire Damage Claims

Regardless of who you are Insured with, if you suffer fire damage to your home or business you will need expert advice and assistance filing your insurance claim.  How can a policyholder know what they are entitled to claim for or where to start?

“Fire and smoke can be devastating and it pays to get expert help.  We will handle all the hassle and paperwork, removing any uncertainty and giving our clients peace of mind”.  Jim Flannery, Director, Balcombes Claims Management

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Business Interruption following a disaster

Most business owners take out insurance cover to protect the business against property damage (fire, theft, floods etc) or against liability claims (Employers Liability & Public Liability).  However equally important is to have cover for Consequential Loss or Business Interruption.  80% of businesses that suffer a catastrophic loss e.g. fire or flood will not survive longer than 2 years after the event if they don’t have BI cover.  IMG_9809

Thankfully most insurance packages for businesses automatically include cover for Business Interruption losses.  However, it is vital to make sure that the sums insured are adequate to ensure full protection against a loss of profit, until the business can be reinstated and turnover restored to where it would have been, had the loss not occurred.

The standard period of indemnity is for 12 months.  In the event of catastrophic damage to a building it needs to be considered in advance, how long it may take to re-build.  Following a fire there could be a need to apply for planning permission if a building has to be demolished and re-built.  It could take months to get an architect and an engineer to design and get all the necessary plans in place and tenders obtained etc before any rebuilding work can even commence.  The “worst case” scenario should be allowed for.

The accessibility of the site; how the building is affected by neighbouring properties; whether there are any specific features or restrictions that may affect progress, could mean a premises could easily be out of action for longer than 12 months.  If an 18 month indemnity period is selected the sum insured should be calculated to be 1.5 times the future annual gross profit, if a 24 month indemnity period is requested, the cover is provided for twice the future annual gross profit figure, covering a 24 month interruption period.

Gross ProfitThe business interruption cover is based on the Gross Profit for the period required to restore the business to its previous position including any trends in the turnover, e.g. if the business was growing at 10% per annum.  In that case the gross profit should be based not only on 10% increase on the previous year’s performance, but if the loss was to happen on the last day of insurance i.e. 12 months from now, then the indemnity period could be for 12-24 months into the future.

The future turnover therefore could be up by 21% on the current period by the time the loss is settled e.g. if last year’s gross profit was €1m – plus 10% = €1.1m projected for this year, plus 10% growth projected for next year = €1.21m.  The 12 month indemnity period could extend to 24 months from today if a fire happened on the last day of the current insurance period.  The Business Interruption cover therefore should be pitched sufficiently to insure for that future value at risk, adjusted pro-rata for any indemnity period greater than 12 months.  The sum insured selected needs to take into account the future projected annual Gross Profit and the required length of indemnity period required to re-instate the business.

Most Business Interruption covers have a “material damage proviso”.  That is, there must be a material damage loss and policy liability under the property damage section before the business interruption section becomes operative.  There are occasions when this is negated by extensions that can be selected e.g. denial of access clause, whereby if the local authorities cordon off access to a business premises for safety purposes resulting in loss of turnover/profit e.g. a fire or explosion in a neighbouring property.  In the recent floods in Donegal there were businesses cut off by bridges being washed away.  Bridge downOr there could be a “suppliers” or “customer’s” extension which would provide cover in the event that turnover is affected by an insured event occurring in a suppliers or a customers premises, that has a direct impact on your turnover/gross profit.

In the event of a loss the immediate priority is to assess the property damage loss.  The business interruption loss can be subsequently calculated and finalised, as the extent and duration of the property damage period becomes known. The following steps are critical:

Property Damage

It is essential to notify your insurer/broker of the loss.  The property policy schedule needs to be assessed to establish the level of cover in light of the facts of the loss.  There may be specific endorsements, warranties or exclusions applicable, and it is vital to gather the evidence that you were in compliance with them.  Damaged contents or stock etc should not be disposed of, until a Loss Adjuster from the Insurance company has inspected it.  If necessary it can be segregated and stored for later inspection, if it is essential to move them urgently to restore trading or to mitigate against further loss or damage.  Next, a detailed inventory needs to be taken of all damaged property, which can be valued later.  Photographs of all damaged items should be taken and retained as evidence.

Most property damage policies include cover for property in your custody or control or for which you are responsible, e.g customer’s or supplier’s goods, leased machines, employee’s effects.  There is generally additional cover for demolition, debris removal, professional fees and the costs of complying with Local Authority requirements.

Business Interruption

The typical cover is for loss of trading income or gross profit (as defined in the policy), less any savings that may accrue to the business as a result of the closure e.g. staff wages if employees have to be laid off, or rent, light, heat and power.  The cover will generally include for any increased costs of working e.g. increased rent on an alternative premises, expediting repairs, overtime, advertising, accountant’s fees etc.  Increased costs can be agreed in order to try and resume trading to retain customers/turnover.  Such expenditure is justified provided it has the economic effect of saving the business from a greater loss.

The business interruption loss is calculated by examining the weekly or monthly turnover in the 12 months before the loss and comparing it with the 12 months after the loss and deducting any savings and adding any increased costs.  These figures can be obtained from the management accounts for the business, or if these are destroyed, from the accountants for the business, VAT returns, bank statements etc.  The definitions on the Business Interruption policy are specified and take priority over the standard accounting definitions, so it is best to get the advice of an experienced business interruption loss assessor to ensure all the information is captured and the business interruption claim is properly presented and negotiated.

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Why do Insurers want to get involved in building work?

IMG_0326Almost all property damage insurance policies on buildings give the Insurer the option to effect reinstatement. “We will pay the full cost of repair or reinstatement as new, or at our option we will arange for the works to be carried out” or some such wording.

Traditionally insurers “adjust” a claim on the basis of costs or estimates submitted. They agree to pay the policyholder the cost of repairs, and hold a retention of 25-30% of the repair costs pending completion of repairs and submission of VAT invoices. They rarely choose the option to reinstate. But it was sometimes implimented as an option where they had an unreasonable policyholder or they felt there was a potential fraud but couldn’t prove it, and didn’t want to pay cash. Insurers simply didn’t want to get involved in effecting reinstatement, as the duties and responsibilities that come with effecting repairs can result in more costly repairs in the end. They can result in endless efforts to satisfy some policyholders who can be very difficult to satisfy, particularly if the option to reinstate is effected against their will.  There can also be difficulties with builders doing shoddy work, resulting in endless complaints to the Insurer/contractor and potential liability for the cost of re-doing work which can escalate the cost of repairs.

During the recession some Insurers decided they wanted to effect reinstatement in order to try and control costs and use the fact that there were surplus tradesmen and contractors looking for less work due to the recession. AXA send out tradesmen to claimants property with AXA logos on their jackets. They were able to drive down the scope of repairs and rates to effect savings.  RSA also tried their hand at appointing their own network builders.  However, Irish people being who they are, generally know a builder or are related to a builder, and do not trust Insurance companies and therefore do not trust the insurance company’s builder.  Some Insurers and adjusters persisted with Managed Repair Networks and squeezed the rates they were paying them. However, cruicially they did not insist on the policyholder using their builder, but insisted on settlement offers being no more than their builder was prepared to do the work for. Sometimes their bluff had to be called, particularly towards the end of the recession when building costs were increasing, but the insurers rates were not.

Many of the network builders on the Insurers panels found Insurer and adjusters too tight-fisted and difficult to work for.  Many found it was costing them money and they couldn’t make a profit on insurance work, so they opted out.

Other problems arose; in 2014 FBD was fined €490,000 for breaches of the Consumer Protection Code, including among other things, for not ensuring that contractors hired to do outsourced work were compliant with the CPC.  They also had to re-do many chimney repairs that were not done properly over a number of years.  We believe that this debacle cost FBD in the region of €10m to rectify the repairs.

In the USA, the UK and elsewhere, there are swathes of litigation cases against Insurers for work carried out by repairers for defective workmanship. It will be no different here.

Why then would Aviva choose in 2017 to effect repairs? Do they want to exercise control over the process with a view to saving costs?  Is what they are doing compliant with the Consumer Protection Code?

The Central Bank requires Insurers under Section 4.38 of the CPC to explain to policyholders before they take out or renew a policy that in the event of a claim they may appoint their own builder to carry out the restitution work. Does a hidden reference in the small print of a 60 page policy booklet to the ‘option’ of doing so, as mentioned in the first paragraph of this article, constitute an ‘explaination’?  Secondly, Section 7.14 of the CPC states that the policyholder shall not be asked to certify any work carried out by a third party appointed by an Insurer.  Yet, on enquiry, Aviva have advised us that their contractor will ‘self-certify’ the works on completion.  Now, where have we heard of problems that this has caused in the past?

If Insurers wish to opt to effect reinstatement they need to be willing to doing two things: 1. they need to sign a standard building contract between them and the homeowner and 2. they need to pay their policyholder to have independent representation and supervision of the repairs.  Refusing to do so is anti-consumer.  Nobody likes to have “solutions” forced on them.  We all like to have certainty and some control over the solution.

Concept image of a lost and confused signpost against a blue cloudy sky.

We believe Insurers should stick to their core business and not get involved in repairs. If they get their underwriting and customer service in order, they will make a profit. If they try and control the whole process from policy purchase to fulfillment, are they moving beyond their area of expertise?  By opting to reinstate Insurers are trying to deprive the policyholder of their right to independent represeatation and expertise.  Where is the consumer protection when it comes to ensuring that the policyholder is being treated fairly?  There is only one answer to the situation; consumers need to vote with their feet and move to an insurer who will treat them as a customer and not as a claimant.

Insurance Brokers who are advising clients on their insurance needs and issuing ‘suitabilty statements’ about particular products would want to warn clients if they are placing a property policy with an Insurer who is opting to effect reinstatement directly, as this may not be what the client wants if they have a claim.

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