Insurer Cancelled our building insurance because we made a claim

[Dougt]

Has this happened to anyone? We made a building insurance claim because of a leaking pipe which has just been settled. In the meantime, we had a letter asking us to contact the insurance company urgently. We called them and apparently the underwriter is cancelling our policy and there is nothing we can do (they weren't going to call us, and we have nothing in writing). They are a broker/intermediary with a limited pool of underwriters apparently.

They suggested we "just go online to find some new quotes"; but most companies ask if you've had insurance cancelled and then you have to call them as not many underwriters will touch you; and this in additional to declaring a claim seems to add on another few hundreds to the premium (e.g. going from £500 with claim, to £800 with history cancellation). It seems unfair as we have made 1 claim in over ten years of ownership. Has anyone had this happen? I think we are going to have to just find a new insurer but it seems unfair that by cancelling on us (which we have to declare) this is costing us more than just our claims history! I've read somewhere online you should try to resolve this with your insurer and if not complain to them, but this can take weeks, and that you can take this to the ombudsman if you think this has caused an adverse finance impact on you.

What reason have they given for cancelling the policy?

Some commercial policies reserve the right to cancel the policy in the event of a claim but doesnt sound like thats the case here

Because we had a claim which has been settled so they have (presumably) recalculated our premiums (which wasn’t due to renew til July). And now won’t cover us. It’s really not very clear. We have had nothing in writing. And they wont tell us where in policy it’s state they can do this , just that they can.

Get legal advice / get the position in writing from brokers and underwriters. We had a massive claim and are uninsurable except out original insurer is obligated by law to insure us. (It costs loads.)

sorry I am being unclear: we are still insured with our original insurer because they have a duty to insure us (as I understand it). Either way, get professional advice.

It's not exact but I had something similar

I was told that many companies are cancelling insurance at the mo

going back a long way, my parents house had subsidence. The insurer had to pay for remedial work but refused to insure the house again and we had trouble finding a company who would. Ended up with RIAS if that's any help.

Which company is it?? We had a huge flood claim and I was scared of being uninsurable but they renewed our policy (Tesco if that helps). It seems shocking that they can do that.

Was the claim in this policy year? you said your renewal was July.
So if the incident occurred in say June and has only just been settled it will need to be added to your 2022-2023 policy. Your underwriter may then decide you don’t meet their criteria and they can no longer quote.
That is not declarable as a cancelled policy as it just counts as no longer fitting the underwriters criteria.

If the claim was after your renewal date it does not need to be added until next renewal. The only time an insurer should cancel following a claim is if they discover something they would not have quoted for at renewal. So say for example you have declared your home is in a good state of repair, they send a surveyor out to assess the damage who reports that you have a giant hole in your roof. That would be grounds to cancel and would be declarable.
Crucially though insurers must give 7 days written notice of cancellation and must tell you the reason for cancellation. If the insurer and/or your broker did not send a letter they are in the wrong.
Absolutely make a complaint. If you are with a broker complain directly to them. If it was the insurer at fault they will refer the complaint to them and normally gets a speedier response than going straight to the insurer.
If you disagree with the outcome of the complaint then escalate to FOS - you have nothing to lose to do so.
I work in insurance complaints for a broker - don’t panic yet.

@Rose789 that’s pretty much what happened, I think the date was before the renewal (it was a leak which took a while to find). That’s for explaining the “no longer quote” thing.
Its just such a headache finding alternative cover as they all ask “have you had insurance cancelled” and i feel like we have to say yes as this is the term being used, although the maybe that’s was simplifying things slightly (but that the term the person on the phone at the broker used yesterday). We have asked for something in writing and to escalate this.

We have also nothing in writing as to how long we have left now! We have online access but it says “policy cancelled” and no access to any documents.

Sorry for typos! Meant thanks not that’s!

They should not cancel a buildings policy because the policyholder made a claim.

Complain in writing, then if you don’t get satisfaction take it to the FOS.

I had this with Halifax after I had a car accident.
It wasn’t my fault but my car was written off, I bought a new car after the insurance paid out and Halifax declined to renew my policy or transfer the existing policy to my new car.
It's never been an issue and I’ve managed to find cover with Tesco insurance.

The flat roof blew off my 'new' bungalow last November and I had to really battle with the insurance company to get the amount needed to replace the roof and lounge/kitchen ceiling, thankfully my surveyor friend was fighting my corner. My renewal came up while the claim was still ongoing and they did renew for a reasonable price. I did try to leave - but no-one else would quote unfortunately. If any of your friends are Which members they have a list of 'approved' insurance companies, the customers surveyed have all had to make claims.

I also recommend posting on the MSE insurance forum, I received genius advice on there. Lesson learnt, I'll never buy cheap insurance again, it's cheap for the wrong reasons.

Cancelling a policy is a technical step insurers can take but often don't. It doesn't sound like they've cancelled the policy, just won't renew.

'Cancelling / voiding' a policy tends to happen where a policyholder hasn't been truthful when taking out the policy (fair presentation of risk. That is why other insurers want to know if you've had a policy cancelled. It is important you get something in writing because I don't think cancelling the policy is the right term to be using.

Our insurers pulled out of the house market so we had to change, now they’ve pulled out of the car market too.

You need to get clarification about exactly why it's been cancelled and when. Ie from what date.
It doesn't make sense they cancelled it mid term because you have a claim and weren't going to contact you.
You need to get more information on this from them.
I work in insurance

We are having a similar problem - we have had our insurance cancelled because our home was unoccupied for a period we believed was within the insurance wording, but when we informed the company it would be unoccupied they cancelled the entire insurance! So we are now out of pocket by hundreds for a month of unoccupied insurance for just a few days. Insurance is a racket :)

It happened to us years ago, except the company wrote to say they refused to renew our insurance. This had to be declared which along with the claim bumped the price up.
When I had my car stolen the car insurance company took a different tack and issued a hugely inflated renewal quote, so of course I went elsewhere, but I didn't have to say I'd been refused insurance. I've no idea why the home insurance company didn't do the same, it would be no skin off their nose

I made a claim after losing half my roof in a storm, we heard a noise in the night, went back to sleep & woke to what I first thought was a cobweb on the ceiling. It was actually a bubble of water, we couldn't sleep in our bedroom until after we had a new roof. I put in a claim & the assessor refused it & our policy was cancelled due to them saying I hadn't informed them that the roof was felt shingles not slates. I had proof I had told them. I wrote to the Financial Ombudsman & received the full cost of the roof & compensation for the problems & stress they had caused.

Ok this is in Australia so might differ slightly, but my insurance company know full well which insurance companies pull these sort of stunts (tends to be the budget ones, that's how they keep premiums low). Yes, you will need to speak to someone and they might have to refer up line to get authority to give you a policy, but after a certain number of years you won't have to do that anymore.

In UK if you've had a policy cancelled you always have to declare it.

Which I disagree with actually. I think some sort of time limit would be reasonable.

Although it's unclear OP's situation and whether that's right or not

I don't think an insurer would use the term "cancelled". You don't cancel insurance policies. They can refuse to renew or void an existing policy but they don't just "cancel" without giving you a detailed reason.

Yes it’s actually the word “cancelled” which is the problem here, and the fact that the staff working from them don’t seem to understand this! Obviously neither did we until this happened! It’s poor training on their part (Dial Direct is the broker/intermediary).

We have been back and forth with them this week as they keep sending contradictory information (saying it’s cancelled in one letter, then confirming over the phone it’s not when we finally get through to the escalations team… we call to chase to the letter confirming this, and are again told by the first person that our policy is cancelled…)

I’ve finally got a letter from then confirming it’s not been cancelled, it’s a “no quote” so going to phone a few new brokers now and explain as don’t want to risk it in case this is somehow recorded somewhere and if we need to claim again it’s invalidated!

Do check, because (once again, in Australia so could be different) but we ask "have you had insurance cancelled, not renewed.... " so you would still be caught by that if they ask in that way.

If you do call up a company for a quote, first find out (before you provide any of your details) what their policy is on this particular issue. The better companies will tell you whether this alone would be sufficient to deny you coverage.

@kirinm they did exactly that when we called them. And then contradicted it. And then when we called them again… it was infuriating. And couldn’t understand why I was getting frustrated with them telling me it was not a cancellation when every other member of their staff i’d spoken to used that word.

@ClaryFairchild i have taken a new policy out today, read out the wording in the letter we finally received from the broker. They agreed all fine and didn’t need to be recorded as a cancellation. I expect there will be a recording of the conversation on file but to be honest I don’t know what else I can do! I’ve taken it out in good faith and explained everything. Hopefully we will not need to claim again!

Op it’s worth making a diary note that on today’s date you renewed and said x at y time. I once had a problem with my house insurance but by being able to say I called them at around 10am on eg 5 May and told them x, they could find the call and didn’t cancel my cover.