Decision Ref: 2018-0087. Rejection of chimney fire insurance claim
The Complainants made a claim under their Farm Multiperil Policy for damage allegedly caused by a chimney fire which was declined by their Insurer. The claim was declined on the basis that policy conditions had not been complied with to provide cover for the chimney fire section of the policy.
The Complainant’s Case
The complainant claimed that he suffered a chimney fire and states that a crack in his chimney stack was visible which was not there prior to the chimney fire.
The complainant made a claim under his Farm Multiperil Policy which was declined by the Insurer due to failure on the part of the Complainant to provide “evidence of an insured peril in operation” and also the Complainant had prejudiced the Insurer’s position by carrying out permanent repair works. The Complainant states that the works were carried out after a site inspection by the Insurer’s Loss Adjuster and that the works were carried out in order to mitigate further damage.
The Complainant also states that the chimney fire claim was improperly declined.
The Insurer’s Case
The Insurer states it was entitled to decline the claim on the basis that the terms and conditions of the policy were not met for a chimney fire claim. Specifically, the Insurer states there was a failure of the part of Complainant to provide “evidence of an insured peril in operation”. The insurer also states the complainant had prejudiced their position by carrying out the repair works.
Policy Terms and Conditions
Scheme A of the Policy provides cover in respect of the following:
Loss of or damage to farm dwelling house and/or contents cause by:
- Fire, Explosion, Lighting, thunderbolt, Earthquake.
The Insurer has Identified General Condition 4(a)(iv) set out bellow in support of its decision to decline the Complainants claim:
The Insured shall
(iv) upon any defect or danger being brought to his notice, forthwith arrange for such defect or danger to be remedied and in the meantime shall take such temporary precautions to prevent accidents as the circumstances may require but so far as practicable no alteration or repair shall without the consent of the Company be made to any premises after any occurrence covered by this Policy until the Company shall have had an opportunity of making an inspection.
The Company shall at all reasonable times have free access to inspect any property and the Insured shall facilitate the Company in every way requested.
Condition 5 of the Policy is also relevant:
- In the event of any occurrence which may give rise to a claim under this policy:
- The Insured shall forthwith notify the Company in writing with full particulars
The Complainant states that the chimney stack developed a crack which had not been noticeable prior to the chimney fire. The Complaint states he got his neighbour to “seal the crack with silicone” to “mitigate any more serious damage”.
Insurers Loss Adjuster’s and Complaints Representative carried out a joint inspection of the chimney fire claim. The Insurer states that its Loss Adjuster expressed concerns to the Complainants Representative as to the source of the damage in circumstances where the damage looked “historical in nature” and in circumstances where the cracking to the chimney stack which contained the flue which had not been in use for some time. The cracking was not on the side of the chimney stack which contained the flue which the Complainant stated had been on fire resulting in a chimney fire.
The Insurer states in the course of the inspection the Complainants Representative advised the Loss Adjuster that the silicone repairs to the chimney stack had been completed by a builder, as opposed to by a neighbour. The Complainants Representative then emailed the Loss Adjuster a month later stating she had made a mistake. The Insurer states that its Loss Adjuster was advised that there would be a builders report which would address the nature and extent of the damage and the condition of the flues. On this basis the Insurer states that its Loss Adjuster did not conduct or arrange for a CCTV investigation of either flue to support a chimney fire claim.
At the end of the inspection the Complainant signed a form provided by the Loss Adjuster which included the instructions, ticked in manuscript, that the Complainant would need to “submit repair/replacement estimates or invoices” and that he would need to “supply copy or repairer/experts report”. The Loss Adjusters notes also recorded that the Complaint was advised to revert with details as to how long the kitchen flue had been out of use.
A letter was sent to the Complainants Representative seeking a copy of a builders report and details of how long the flue had been out of use. A follow up email was sent and a further request made by telephone.
A month after the inspection the Complainants Representative emailed the Loss Adjuster advising of its earlier mistake in stating that a builder had carried out the repairs and providing the correct details who carried out the repairs which was the Complaints “neighbour/friend”. The Complainants Representative had also advised that the flue had been out of use for about 9 years. The Loss Adjuster advised that in light of concerns as to the source of the damage he may need to undertake a CCTV inspection of the flue. The Loss Adjuster requested that the Complainant arrange a CCTV survey.
The Complainants Representative advised that the repairs had already been carried out as the Complainant “had no option but to proceed with repairs” “as he needed heat for the house”. The Complainants Representative highlighted that there was no request for a CCTV survey form the Loss Adjuster on the day of inspection. It was indicated that the flue was relined and stack was rebuilt.
Contact Note relating to phone conversation between Loss Adjuster and the Complaints Representative:
Loss Adjuster advised Complainants Representative that he had spoken with the builder who has confirmed dates the work was carried out and also that there was damage to only one side of the chimney and that this doesn’t provide an enough evidence that the chimney was damaged during a recent chimney fire.
The Complainants Representative was to speak with the builder and get him to provide written confirmation as to what condition he found the chimney and what work he did.
The Complainants Representative admits advising the Insured that he could go ahead and start the repairs following the inspection despite not getting the go ahead from the Loss Adjuster. Loss Adjuster reminded Complainants Representative that he had made specific requests for details of who carried out the temporary repairs, builders report and that there were discussions in terms of the damage to the redundant side of stack therefore the Complainants Representative would have known the Loss Adjuster had concerns regarding liability.
The Loss Adjuster received a builder written confirmation from the Complainants Representative stating:
I wish to confirm that I replace flue liners from beneath roof level on the active flue servicing the fire.
Loss Adjuster stated that this was of no use as the builder doesn’t mention the condition the active flue was in before the builder commence work. A further email from builder which stated:
Damaged flue removed from active flue and liners put in.
The Loss Adjuster wrote to the Complainants Representative reiterating the view that the damage to the chimney stack was not caused by a “recent chimney fire”.
The Adjuster went further and stated:
The most significant damage noted to the stack is historic and in our view it can only have happened when the particular flue that the cracking aligns to was in use. This was not within the last 9 years.
In rejecting the claim the Loss Adjuster had also relied on the claim that the Insurer’s position had been prejudiced as the works were completed “prior to demonstrating that the active flue had been damaged”.
The Complainants Representative responded emphasising that the repair works were carried out in order to mitigate further damage and highlighted that no CCTV was requested on the day of inspection.
Final Response Letter was issued. The letter reiterated the same reasons as previously mentioned and states it was clear that the issue of liability remained to be determined. On this basis, the Complainants Representative was wrong to advice the Complainant to go ahead with the repairs as no clearance was given by the Insurer.
There was a delay by a month in reporting the claim and it is not clear why as the Complainants Representative attended in the days after the incident.
The FSPO accepts that the Complainant was acting within his rights in carrying out the temporary silicone repairs.
The Complainants Representative mistakenly advised the Insurer’s Loss Adjuster that a builder had carried out the temporary silicone repairs. The Insurer states that because of this there was no need for a CCTV inspection as a report from a builder would be produced which would address the nature and extent of the damage to the flue prior to repair works. It is clear that builders report was requested.
The Loss Adjuster had requested for a CCTV survey 3 weeks after the Complainants Representative advised of her mistake in advising that a builder had carried out the temporary repair work when it was the Complainants neighbour. Permanent works had already been completed. The terms of the policy state that no permanent repairs should be undertaken without the consent of the Insurer until the Insurer “shall have had an opportunity of making an inspection”. In this case the Insurer did have the opportunity of making an inspection. The same policy provision also requires an Insured to facilitate the Insurer “in every way requested”.
The FSPO accepts that the Insurer was entitled to revisit the question of a CCTV survey due to the fact a builders report wasn’t provided as promised on the day of inspection.
It is unclear how could the Complainants Representative advise the Complainant to go ahead with the temporary works in the absence of consent from the Insurer. Insurer’s Loss Adjusters had raised concerns as to the cause of the crack to the chimney stack thereby clearly indicating that the Insurer was not accepting liability.
In order to establish weather, the Complainant has suffered a loss arising from the occurrence of an insured peril the Complainant did not produce the builders report which was promised on the day of inspection which might have dealt with the liability matter. Thereafter, the builder who completed the permanent work provided conflicting reports as to the nature of the damage, the first oral communication was different from the Complainants version of events. The FSPO are not satisfied that the builders subsequent email communications was sufficient to meet the threshold of proving a loss resulting from the occurrence of an insured peril. The cause of the loss was not addressed by the builder at all.
The FSPO accepts that the Complainant had failed to prove the suffering of a loss arising from occurrence of an insured peril. The Insurer was entitled to request the carrying out of further inspections to investigate the matter and, in circumstance where the inspections were impossible due to the fact the Complainant had carried out permanent repairs the insurer was entitled to rely on the prejudicing of its position as further grounds to decline the claim.
Had the permanent repairs had not yet been carried out. The Complainant would have been in a position to carry out a CCTV survey to proof that the damage to the chimney stack was a result of insured peril. In this case no proof has been provided nor its possible of being obtained.