Don’t let insurers use a legal loophole to avoid paying up

No one likes paying out money if they can avoid it and insurance companies are no different. That’s why they will always look for a reason to avoid paying out when you make a claim. Unfortunately, people often play into their hands by not following the terms of the policy. There was a classic example of this in a recent case before the Court of Appeal involving arnlandlord who had insured one of his properties with a large insurance company. When the building was later ravaged by fire the insurers refused to pay out. They pointed to a clause that had asked if the premises were protected by a sprinkler system. At the time the policy was taken out it had been so the landlord answered yes. However, the tenant who rented the building from the landlord later disconnected the sprinkler system and it was inoperative at the time of the fire. The insurers said this rendered the policy invalid. The landlord took legal action to make the insurers pay up but lost his case in the Court of Appeal. Thousands of people find themselves in this position every year. Polices are taken out and conditions are agreed, but over time our circumstances can change and we may forget to keep up with the terms of our policies. For example, many people now have smoke alarms in their homes and this can help keep down insurance costs. However, you then have to make sure the alarms are kept in working order or your insurance could be affected. The same thing applies when you tell your insurers you have a burglar alarm. You should remember to put it on when you leave the house or you may find your policy is invalid if you are then burgled. Similarly, you could face problems if you tell your insurer that you keep your valuables in a safe but then leave them on the coffee table overnight. If you tell your insurer that your car is kept in a garage every night then make sure you abide by that. If you park it on the street because the garage is full of clutter then you may have problems if it is stolen. It’s easy to forget the exact terms of a policy as time goes by but it’s worth taking the trouble to check it occasionally. This needn’t be difficult. Sometimes, it’s just a case of common sense, as in the case of the sprinkler system. Sometimes you may need legal advice. A lot of law firm marketing nowadays relates to dealing with insurance claims so there’s no shortage of help – especially with personal injury cases. Insurance can be expensive. Don’t give your insurers a reason to avoid paying when you need to make a claim.