Get your insurers go-ahead before you pay for repairs

If lightning strikes your home, do not rush to fix or authorise replacement yourself. Instead, report the incident to your insurer and seek advice on how to handle the situation.

“Replacing or repairing damaged property without consulting your insurer might see your claim being rejected – after you have forked out for the damage” says Gari Dombo, Managing Director, Alexander Forbes Insurance.

Insurers do their best to ensure that settlements are reasonable, so that their premiums can remain affordable and competitive within the industry.

So, “if insurers routinely pay more than they should to restore clients to the same position as they were in before the claim, or even place clients in an improved position, premiums would increase dramatically” warns Dombo.

Insurers have the right to decide whether to repair, replace or settle in cash. “If any action taken by the insured interferes with this decision, the insured may end up not having their claim settled - or receive a lower settlement than expected” adds Dombo.

If the loss or damage is greater than a critical threshold, determined by their insurer, the insurer may wish to have an assessment done to establish that the cause of the loss is indeed covered by the policy, and what it will cost to repair or replace.

If, for example, policy holders authorise the replacement of expensive electronic systems, like personal computers, hi-fis or home security systems without first getting permission from their insurer, the insurer may decide:

· To reject the claim because they have not examined the damaged property to establish whether the cause of damage was covered by the policy (assuming the damaged goods have been disposed of).

· To reject the claim because they have been unable to verify that only insured damage was repaired.

· That the damaged equipment was repairable, and will only pay what it would have cost them to repair it.

· That the damaged equipment could have been replaced more economically, and then only pay what it would have cost the insurer to replace it.

That said, “during emergency situations where you need to act quickly to protect property and prevent further loss, you should act as required and then immediately inform your insurer” advises Dombo.

Also, policy holders should check whether their policies have extensions to help pay for common emergency actions, without seeking permission first.

These include the cost of:

· Hiring security guards after a break-in or other damage to the property.

· Towing and storage of a vehicle after an accident. It is “strongly recommended that you have your insurer appoint the tow operator, so that your vehicle does not end up in the wrong hands” warns Dombo. Some insurers will not pay the tow and storage costs unless they have appointed the operator.

· Emergency repairs to safely finish a journey up to a certain limit.

Dombo says “people are duty bound to protect, maintain or adequately repair their property and instead act as if uninsured. Not maintaining one’s property can often see claims rejected because policy holders have failed to exercise the right care or undertake sufficient maintenance on their property.”

In other words, “act is if you are not insured and do not abandon your property to the care of insurers”, adds Dombo.

Also, consumers should not “dispose of, give away or sell damaged goods after an accident, without first obtaining permission from their insurer, as damaged property is often used as evidence to determine if a claim is valid,” warns Dombo.

Thereafter, once the claim is paid, damaged or replaced property is termed ‘salvage’ and insurers can legally sell it to defray costs.

“If you dispose of the damaged goods before you receive permission, you may find your claim being rejected, or you may have to reimburse your insurer for salvage” concludes Dombo.