Household insurance in limbo
Can anyone help please.
My colleague has recently submitted a relatively small value household insurance claim via his broker to his insurance company.
Everything was moving along accordingly until the loss adjuster said that he could not settle on a figure until the matter of previous undisclosed claims was resolved.
This was news to my colleague. He had indeed made a couple of low value claims several years previously with another insurance company, but had presumed that his broker would have disclosed all details to the new insurance company when the business was transferred.
He has no recollection of completing a new proposal form, where he would have had to detail previous claims. As far as he was concerned, his broker had simply transferred his business and would take care of all the details.
While the insurance company and the broker are attempting to locate the original insurance proposal, the insurance company has said that it reserves the right, as a result of the previous non disclosure, to null and void ‘ab initio’ the existing policy at any time, until the current claim is either settled or denied.
Furthermore, my colleague cannot cancel the existing claim and seek household insurance from another insurance company (this time ensuring that all details of previous claims are disclosed) as the claim has already been notified to the insurance company.
He is effectively being denied insurance, which would be a major problem if he has to make another claim in the interim.
This means that he is a highly vulnerable position, where, not only does he not have guaranteed household insurance from his insurance company, but he cannot get insurance from a different insurance company.
Can the insurance company do this?
Thanks in advance