As if we needed any further reminder of the dysfunction in the insurance industry towards flood victims, the consumer rights champion Which? has exercised its power to raise a super-complaint.
You may have seen it in the news. The super-complaint, made to the Financial Conduct Authority (FCA), is targeted at travel and home insurance; the latter, of course, affects us here within the flooding community.
In their own reporting, they cite “bizarre policy technicalities and shoddy claims service”. In the same article, fellow consumer champion and household name Martin Lewis describes an imbalance of power between insurers and their customers.
Professional representation
There are a lot of ways in which more can be done for victims of flooding. One of these is to tackle the insurers’ imbalance of power through the use of loss assessors. Readers of Flood Industry will already know the role of loss assessor and the distinction (diametric opposite) to loss adjustors who represent insurers.
With a loss assessor representing a claimant, they go from being a lone lay person under extreme duress from their property damage, to being professionally represented by an industry expert: someone who can strip away any emotion and hold the insurer to account where appropriate.
A traditional model of loss assessing sees a commission from the sum awarded taken, say 10%. I think a way more aligned to the policyholder is for the loss assessor firm to also act as the principal contractor, with all remedial works and service provided paid for by the claim at once. It allows for an end-to-end service with no gaps, such as a cash settlement transpiring to fall short when all is said and done.
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Better outcomes
My company operates in this space, and the kind of problems we see before we get involved include claims moving at a glacial pace, a lack of the correct equipment going in within those crucial early days, unreasonable objections to fair requests, tempting but insufficient cash settlements and general low-balling.
There are so many pitfalls that a stressed and unwary policyholder could trip up on, and a good loss assessor will sidestep them all.
Complaining to regulators
The FCA regulates the insurance industry. In Which?’s article, they describe FCA acknowledgement of insurance industry shortcomings, including in claims relating to storm damage, but highlight that the regulator has published no clear plans to address them.
Individuals are still entitled to make their own complaints, which are channelled through the Financial Ombudsman Service. However, this process itself may be time-consuming and stressful.
The super-complaint is designed to force the regulator’s hand against the insurance industry as a whole.
Flooding - Build Back Better
I’ve talked of the lack of awareness for loss assessing. I also think our flood community needs to do more to get the word out for Build Back Better – the scheme for flood victims, which makes an additional £10,000 on top of their claim available for flood resilience and resistance measures.
When used, it can help break the cycle of flood damage or at the very least mitigate its impact – everyone wins when this works – less future liability for insurers and misery for homeowners.
Spread the word
People do not like to think of themselves as the little guy. But sadly, at present, for a lone policyholder up against an obstinate insurer, it can feel like David and Goliath. If you come across such mismatches, spread the word about loss assessors and how we can help – there is a better way. And trumpet Build Back Better too – let’s give flood victims increased hope for the future.
About Alex Thoemmes
Alex is a seasoned professional within the flooding community. Happy to share advice when asked, he has a number of solutions for people before, during or after an incident. And if he cannot help directly, he will happily point people in the right direction, based on his extensive knowledge and network.