I stumbled across the BBC programme Inside Out last week and thought I’d discuss it here. It spoke about a woman called Michelle Barber who had encountered the worst of all problems when it came to making an insurance claim.
Her Barnsley home was subject to an arson attack which left the property needing to be completely rebuilt. Her insurer at the time was the home insurance giant Aviva (formally Norwich Union) who initially paid out the whopping £240,000 for her home to be rebuilt.
It later came to light that Ms. Barber had previously received a £100 fine for an over payment of benefits. Something that avoided the police but was a criminal offence none the less. She had not told Aviva of this and when they found out she was told that it voided her insurance policy. As they had already paid out in respect of her claim, they demanded the full £240,000 to be refunded to them.
I’m sure the letter through the door requesting this was not a welcome one and I am sympathetic towards the lady in the fact that it must be a horrible situation to go through. However, she would have been asked at the time of taking out the cover about criminal convictions and the like and obviously answered in the negative. The blame therefore entirely lays with her.
Many will argue that Aviva are being a little unfair as it was only a £100 fine but from there point of view they would not have covered her in the first place had they known so why should they cover her now. They would void the policy whether she has had a claim or not.
I think it is good that this story is spread as much as possible. It is vital that everything is disclosed to your insurer when taking out a policy as non disclosure can lead to being severely out of pocket. If you’ve gone to the trouble of taking out insurance cover in the first place, you should at least make sure you are telling them everything you know no matter how big or small a deal you think it is.