Q: Whether insurer responsible for cost of remedying faults in building work carried out as part of a claim for flood damage
A:Mrs C lived in an old mill house which was badly damaged by winter floods, following prolonged rain and storms. She was insured by the same firm for both buildings and contents and she submitted claims under both policies.
The insurer accepted liability and appointed contractors to carry out repairs to the property. After a few weeks, however, Mrs C concluded that the contractors were making unreasonably slow progress. She discussed the situation with the insurer and said she would like to appoint a local surveyor to represent her and supervise the work. The insurer agreed to her proposal and confirmed that it would pay the surveyor’s fee.
During the course of the subsequent works, Mrs C’s surveyor replaced the existing contractors with a new firm of builders. And Mrs C asked for some additional work to be carried out, at her own expense.
As time went on, Mrs C became increasingly dissatisfied – both with the surveyor and with the standard of the building work. When all the work was eventually completed, she hired a different surveyor to prepare a report on what had been done. He identified a number of faults in the building work and estimated that it would cost just under £50,000 to remedy matters.
Mrs C sent the report to the insurer, together with a claim for the cost of putting things right. However, the insurer refused to meet the claim. It said that as Mrs C had appointed a surveyor to oversee the work, responsibility for any faults lay with him. Mrs C then brought her complaint to us.
Complaint upheld in part
It was clear that there were a number of problems with the building work. Some of the faults listed in the report related to the additional work that Mrs C had asked the builders to carry out. We agreed with the insurer that it was not responsible for putting right any defects in this additional work.
However, we said that the repair work relating to the flood damage was a different matter. The insurer had authorised and paid for the work. And it remained responsible for ensuring that the work was completed satisfactorily, regardless of the fact that – with its agreement – Mrs C had appointed a surveyor to oversee the builders.
We said the insurer should pay Mrs C £20,000 to cover the cost of remedying the defects in the work carried out to repair the flood damage.
The section has some interesting situations like:
" insurer refuses to pay claim for storm damage when it discovers that policyholder is serving a prison sentence"
"claim for flooding and damp in basement after exceptional rainfall – whether policy also covered cost of repairing damaged damp-proofing in walls"
" whether problem with floorboards was caused by a relatively recent flood or by rot that had been spreading for some years"
To read the details of those complaints and the decision of the Financial Ombudsman Service you need to visit http://www.financial-ombudsman.org.uk/publications/ombudsman-news/68/68-building_insurance.html
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