Andrea asked us to get involved when her insurance company cancelled her policy and refunded her premiums. This was after she had put in a claim for £120,000 worth of jewellery that had been stolen from her home.
What happened
When Andrea's home was burgled and all her jewellery was taken, she reported it to the police immediately.
She called her insurer to explain the situation, and a loss adjuster interviewed her to get details of the stolen items. There were a lot of items on the list, many of which were jewellery. The loss adjuster estimated the value of replacing all the stolen items at £120,000.
When the insurance company got the loss adjuster's report, they decided to cancel Andrea's policy and refund her premiums. They explained she was only insured up to £25,000. To them, Andrea had under-insured her items, so voiding the policy was their only option. They said if they'd known the true value of the items, they wouldn't have insured her.
Andrea felt that this decision was unfair and that the valuation figure was too high. She believed the stolen items wouldn't have sold for that much money. The insurer explained the figure was so high because they'd have to replace the stolen items with brand new versions.
Andrea referred the matter to us.
What we said
The first thing we did was find out how the loss adjuster had reached that amount. The insurer gave us the list of stolen items, which Andrea had signed, as well as evidence of their cost. We couldn't see anything wrong with the loss adjuster's figures.
We then needed to look at whether Andrea had under-insured her items and if the decision was unfair. We looked at Andrea's policy to find out what she'd been asked when she took it out. There wasn't much information in the original policy, but it had been renewed several times since.
With each year's renewal forms, there was a covering letter. In bold text, it said: "Please ensure all the information you provide is accurate and up to date, as any inaccurate information could impact upon the success of future claims."
We also saw that on Andrea's renewal forms, which she had signed, it said: "Please check this information carefully and call us immediately if anything is untrue, incomplete or out of date so we can send you new documents."
Below the contents section Andrea had to confirm that "the full cost of replacing the contents of your property does not exceed £25,000".
The insurer said that if they'd known the true cost of Andrea's items, they wouldn't have insured her. They sent us their underwriting guidance to explain their point. In the guidance it said that insurance wouldn't be granted if the contents were worth more than £100,000, or if there was an "excessive amount of jewellery".
We decided not to uphold Andrea's complaint. It didn't look like Andrea had taken enough care to complete the forms with up-to-date information. We also agreed that if the insurer had known the true cost of the items, they wouldn't have given the insurance.
We recognised that Andrea had gone through a very distressing experience but, from the evidence we'd seen, didn't feel that the insurer had treated her unfairly.