Insurance claim - Water damage
Discussion
Looking for some advice regarding an insurance claim.
Business premises recently flooded, burst water main. Claim will be from water company insurance, not my own.
Initial contact from the insurers Loss Adjuster. I was asked to send over a list of damages.
I send a list along with my estimated costs.
First reply I get back is :-
'I also have to advise that *the insured* are not liable on a ‘new for old’ basis, rather they are liable on an indemnity basis which means they are obliged to the value of the goods at the time of the damage, that allowing for usage, deterioration, wear & tear and age etc.'
Now if I take the first item on the list - It's large MDF Desk tops and shelves. Made by us in house to fit specific equipment that we hire out. Enough kit to build 12 desks. Some of these have been in use for several years, others built more recently as we needed extra kit. For all intents and purposes, you couldn't tell a 7 year old desk from a 1 year old desk.
The cost I have submitted is to buy in the new sheets of MDF along with a cost to get it in the workshop and re-make the desk tops. It's not something I can buy in 'off the shelf' new, never mind used. It's probably also virtually worthless to anyone else.
Second Item on the list - 6 identical leather sofas. 5+ years old, but as new condition as very little use. If i tried to sell these (before the water damage) I'd be lucky to get £100 each on them (guessing), But I'm going to find it near impossible to buy 6 identical used sofas in new condition. So I've priced it for 6 new ones (cheapest available from IKEA).
My question is - do I need to just suck this up and accept a lower value simply because the stuff is used? Before the flood, I had 12 desks and 6 sofas I could hire out, now I don't. Much of the list is custom made stuff by us 'in house'.
Business premises recently flooded, burst water main. Claim will be from water company insurance, not my own.
Initial contact from the insurers Loss Adjuster. I was asked to send over a list of damages.
I send a list along with my estimated costs.
First reply I get back is :-
'I also have to advise that *the insured* are not liable on a ‘new for old’ basis, rather they are liable on an indemnity basis which means they are obliged to the value of the goods at the time of the damage, that allowing for usage, deterioration, wear & tear and age etc.'
Now if I take the first item on the list - It's large MDF Desk tops and shelves. Made by us in house to fit specific equipment that we hire out. Enough kit to build 12 desks. Some of these have been in use for several years, others built more recently as we needed extra kit. For all intents and purposes, you couldn't tell a 7 year old desk from a 1 year old desk.
The cost I have submitted is to buy in the new sheets of MDF along with a cost to get it in the workshop and re-make the desk tops. It's not something I can buy in 'off the shelf' new, never mind used. It's probably also virtually worthless to anyone else.
Second Item on the list - 6 identical leather sofas. 5+ years old, but as new condition as very little use. If i tried to sell these (before the water damage) I'd be lucky to get £100 each on them (guessing), But I'm going to find it near impossible to buy 6 identical used sofas in new condition. So I've priced it for 6 new ones (cheapest available from IKEA).
My question is - do I need to just suck this up and accept a lower value simply because the stuff is used? Before the flood, I had 12 desks and 6 sofas I could hire out, now I don't. Much of the list is custom made stuff by us 'in house'.
The third party (or their insurer) are only liable to pay you market value for goods damaged. If you want new for old replacement, you need to claim off your own insurance, which may well be covering you new for old.
However, when they contact the water boards insurers, they will get the same response, so they won't be able to recover their entire outlay. Hence you'll have a claim that cost your own insurers, on your record. This may or may not effect future premiums.
However, when they contact the water boards insurers, they will get the same response, so they won't be able to recover their entire outlay. Hence you'll have a claim that cost your own insurers, on your record. This may or may not effect future premiums.
Advise them that you will need to add cost of lack of equipment, fixtures and fittings on a daily basis until damaged fittings are paid for, replaced and you are fully operational. If they will only pay for econfdhand then say as they need to be matching items they can alternatively supply the correct number if matched pieces.
A suitable daily rate will generally focus the insurers attention.
A suitable daily rate will generally focus the insurers attention.
TwigtheWonderkid said:
The third party (or their insurer) are only liable to pay you market value for goods damaged. If you want new for old replacement, you need to claim off your own
I don't necessarily 'want' new for old, but it's literally the only way I can get suitable replacement. I want to be in the position I was before the damage.What is the market value for a custom cut piece of wood that is only of use to me? Zero!
So suck it up and claim on my own insurance?
TwigtheWonderkid said:
The third party (or their insurer) are only liable to pay you market value for goods damaged. If you want new for old replacement, you need to claim off your own insurance, which may well be covering you new for old.
Surely market value is completely irrelevant. You are claiming for your loss. Not related to market value in any way.JZZ30 said:
I want to be in the position I was before the damage.
Therein lies the rub I'm afraid. If they have you enough to replace stuff year old furniture with brand new furniture you wouldn't be in the same position that you were in before the damage - you would be in a better position.You can argue about exactly what a fair deduction for age and wear and tear might be (eg if there isn't really a well defined second hand value, an alternative might be to consider the expected lifespan of the furniture and deduct the appropriate percentage from the new value). However you can't get away from the fact that the third party insurer is entitled to make a deduction of some sort.
Or you can claim on your own policy - if it offers new for old cover then that is likely to be the best and easiest option.
Austin_Metro said:
Also, your water company’s insurance position is irrelevant to their liability to you.
If you are to claim in full off your insurance, your insurance has a right to subrogate against them. So it could cost them more.
They do, but if his own insurers pay out more than legal liability, because that's what the contract demands, the tp insurers are only liable to cover their legal liability. If you are to claim in full off your insurance, your insurance has a right to subrogate against them. So it could cost them more.
Eg, many car insurance policies have a clause saying they will replace your car with a new car if written off within the first 12 or 24 months. That's a benefit they are providing. If they replace your 23 month old car with a new car, and it was a non fault claim, when they subrogate against the tp insurer, the tp insurer is only liable for their legal liability, which is the value of a 23 month old car of that make and model.
TwigtheWonderkid said:
They do, but if his own insurers pay out more than legal liability, because that's what the contract demands, the tp insurers are only liable to cover their legal liability.
Eg, many car insurance policies have a clause saying they will replace your car with a new car if written off within the first 12 or 24 months. That's a benefit they are providing. If they replace your 23 month old car with a new car, and it was a non fault claim, when they subrogate against the tp insurer, the tp insurer is only liable for their legal liability, which is the value of a 23 month old car of that make and model.
Agreed, but that is slightly different. Here OP’s indemnity is being limited to what the water co are insured for. Eg, many car insurance policies have a clause saying they will replace your car with a new car if written off within the first 12 or 24 months. That's a benefit they are providing. If they replace your 23 month old car with a new car, and it was a non fault claim, when they subrogate against the tp insurer, the tp insurer is only liable for their legal liability, which is the value of a 23 month old car of that make and model.
If it was me I would be telling the water co that my claim is against them and I would be recalculating my losses to cover business interruption, management time and every reasonable head of claim I could think of. What they are insured for is their problem.
That water co wants to palm OP off with its loss adjuster is to water co benefit.
Austin_Metro said:
TwigtheWonderkid said:
They do, but if his own insurers pay out more than legal liability, because that's what the contract demands, the tp insurers are only liable to cover their legal liability.
Eg, many car insurance policies have a clause saying they will replace your car with a new car if written off within the first 12 or 24 months. That's a benefit they are providing. If they replace your 23 month old car with a new car, and it was a non fault claim, when they subrogate against the tp insurer, the tp insurer is only liable for their legal liability, which is the value of a 23 month old car of that make and model.
Agreed, but that is slightly different. Here OP’s indemnity is being limited to what the water co are insured for. Eg, many car insurance policies have a clause saying they will replace your car with a new car if written off within the first 12 or 24 months. That's a benefit they are providing. If they replace your 23 month old car with a new car, and it was a non fault claim, when they subrogate against the tp insurer, the tp insurer is only liable for their legal liability, which is the value of a 23 month old car of that make and model.
TwigtheWonderkid said:
BertBert said:
Surely market value is completely irrelevant. You are claiming for your loss. Not related to market value in any way.
Losses are normally made good in financial terms. That's where market value comes in. BertBert said:
TwigtheWonderkid said:
BertBert said:
Surely market value is completely irrelevant. You are claiming for your loss. Not related to market value in any way.
Losses are normally made good in financial terms. That's where market value comes in. I assume that the water co have damaged OPs stuff through negligence. So this is a tortious claim.
“Damages awarded in respect of a tort.
The general aim of an award of damages in tort is to put the injured party in the same position as they would have been in if the tort had not occurred. Damages in tort aim to restore the claimant to their pre-incident position.”
“Damages awarded in respect of a tort.
The general aim of an award of damages in tort is to put the injured party in the same position as they would have been in if the tort had not occurred. Damages in tort aim to restore the claimant to their pre-incident position.”
TwigtheWonderkid said:
It might be harder, but even bespoke items can lose value with age. Or some items may increase in value. If something costing £500 new 5 years ago now costs £1000 to buy a 5 year old one, you're entitled to £1000, market value.
But you can't buy it, it was made, so you only have the cost of remake to guide the amount.spikeyhead said:
Surely the fair market value is the cost to replace with something equivalent, not the cost that would be raised when selling them.
A lot of the time that's the same. If you would have been able to sell your 5 year old item for £500 on the day of the claim, someone else could be selling one the same age for £500 that you can buy. Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff