Many insurers are using the small print in their policies to try to avoid paying up
Home insurers are unfairly refusing claims from customers who have been burgled, Money Mail research reveals.
It means customers who have suffered a break-in are being forced to wait for months to get a payout.
In one case an insurer declined a customer’s claim because they left their keys in the hallway, where burglars fished them out through the letterbox.
In another, a customer was denied a payout because they did not lock their porch door — even though they had set their burglar alarm and thieves had smashed the main door to enter the property.
November is typically the busiest month for burglary claims, according to research by Lloyds Home Insurance.
But many insurers are using the small print in their policies to try to avoid paying up. And with the average home insurance policy more than 22,000 words long — around the length of Alice’s Adventures In Wonderland by Lewis Carroll — customers are being caught out.
Money Mail analysis of complaints made to the Financial Ombudsman over the past four years reveals that insurers have declined claims by arguing that victims breached the terms of their policies.
But in more than a quarter of complaints about contents insurance, the Ombudsman made the insurer pay up.
Around 87 per cent of home contents policies say there must be evidence of ‘force’, ‘violence’ or a ‘break-in’ if you want to make a burglary claim, according to financial information firm Defaqto.
Many also won’t pay out if keys are ‘left in view’ or if you forget to set the burglar alarm.
Experts warn that insurers are increasingly exploiting these clauses to decline legitimate claims. Last year, Elite Insurance refused to pay when a burglar left a house by ‘grabbing’ a window, ‘flinging’ it open and jumping out.
How they dodge payouts
1. Burglars didn’t use ‘force’ or ‘violence’ to enter or exit the property. Many insurers demand proof that thieves smashed a window or broke down the door.
2. You forgot to set the burglar alarm. If you have a security system installed, you must ensure it is turned on every time you go out.
3. The keys were ‘left in view’. If burglars could see where you left your keys through the window or letterbox, insurers may refuse your claim.
4. Forgetting to lock the porch door. Even if the main door was secure and burglars smashed the glass, this could still invalidate your policy.
5. You don’t have receipts for all your belongings. As well as proof of purchase for expensive items such as jewellery, some insurers require receipts for anything from clothing to toiletries.
The insurer claimed this did not count as force. The Ombudsman, however, ruled that ‘flinging’ was violent, adding: ‘I can’t imagine that an escaping thief would hop delicately through/from a window.’
Elite Insurance also refused to pay out in a case where a family were burgled while they slept.
Police suspected burglars had broken in by ‘fishing’ keys through the letterbox. Elite said they must have been ‘left in view’, and that no force was used.
The Ombudsman said: ‘I think they would only have been in view had the letterbox been opened by the thieves. In itself that would represent force.’
Meanwhile, Admiral refused to pay up when a couple did not lock their porch door, even though they had locked the main door and set their burglar alarm.
The thieves opened the porch door and smashed the glass of the main door. The policy said homeowners must ensure ‘all the security devices fitted to your home are put into operation’.
The Ombudsman said: ‘That means if the porch door had no lock the claim would have been paid . . . that can’t be fair.’
The Ombudsman also ruled against Admiral when it refused to compensate a man after burglars broke the glass of a back door and entered using keys left in the lock.
Around 87 per cent of home contents policies say there must be evidence of ‘force’, ‘violence’ or a ‘break-in’ if you want to make a burglary claim
The policy said customers must remove keys from locks when not at home. But Admiral admitted it couldn’t read all of the details over the phone and did not post a copy, so had only sent a link to its terms online. The Ombudsman ruled that it should have been ‘more clearly’ highlighted.
UK Insurance, which underwrites Direct Line and Churchill, wouldn’t pay for a man’s stolen Kindle, cash, jewellery or clothing because he couldn’t prove he owned them.
The Ombudsman, which must judge whether an insurer is being ‘fair and reasonable’, told Direct Line to pay out. It said: ‘I do not think the average person should be expected to have proof of ownership for everything they own.’
This year, the Ombudsman has received 1,421 complaints about home contents insurance, including burglary claims. Of these one in four (26 per cent) were upheld.
Insurers received 152,128 claims for burglary in 2017, a fall from 159,204 in 2015, according to the Association of British Insurers. Some £12.9 million a day was paid out in property claims in 2016.
James Daley, director of Fairer Finance, says: ‘The length and complexity of policies is a problem. Even the shortest home insurance policy is just under 9,000 words.
‘The good news is that the Ombudsman sides with customers in a lot of these cases. It’s no longer okay to point to the small print.’
Elite Insurance closed to new business last year. A spokesman for Armour Risk Management, which is looking after Elite’s existing policies, says the insurer is ‘committed to treating customers fairly’.
A spokesman for Admiral says: ‘We sometimes include specific endorsements requiring a customer to take reasonable measures, [which] will be read out by our agent or displayed online.’
A spokesman for UK Insurance says: ‘We try to take a pragmatic approach when it comes to proof of ownership. This can be provided in a multitude of ways including a bank statement showing the transaction for an item, or a photo.’