Bicycle insurance - Payout too low
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A common dispute is if the insurer's proposed payout for your loss is too low. Insurance companies must offer you a proper payout for the value of your bike or the cost of repairs. Our advice is not to accept the first offer given by the insurer over the phone.
Generally, your policy should allow you to buy a like-for-like bike in a similar condition in your local area or to get the bike repaired. The insurer should only deduct the excess you agreed to when taking the policy.
As a last resort you can contact the Financial Ombudsman Service, which will act as a mediator in your case.You should know
- Make sure you declare any changes in personal circumstances that may affect your policy
- The quoted price will be based on a less detailed set of data about you, so the actual price may go up once the company has received more
- detailed information about your circumstances and desired level of covers
- Most insurance policies will renew automatically, but your insurer should inform you of this in good time beforehand
- After you take out a policy, or it is renewed, you’ll have a cooling-off period during which you have the right to cancel. This is typically 14 days
- Always provide as much evidence as possible for any claims you make
- If you cannot resolve your issue you can take your case to the Financial Services Ombudsman after eight weeks
- If you’re making a complaint about making an insurance claim rather than a mis-sold policy, check your documents to see who the “underwriter” is. You’ll need to make a complaint to that organisation.
All insurance policies are there to help protect you against emergencies. It is important that you read your terms and conditions prior to signing any agreement.
It is essential that you declare any changes in your circumstances that may affect your policy, as otherwise this can void your policy. If you are in any doubt, contact the insurer immediately.
Difference between quote price and actual
Sometimes the price quoted by an insurer is different from the price paid after you have signed the agreement. This may be because the price that they quoted was based on assumptions, or perhaps the onus was on you to provide some additional information.
If this is not the case, go back to the insurer and challenge the difference. If you’re within the first 14 days, you can cancel without any issues. After this, you will need to prove the terms that you signed to are unfair.
Any exclusions that the insurer will not pay out on should have been clearly explained to you when you signed the agreement. This could be within the general terms of the agreement.
The excess is a way of reducing the cost of your policy. This means that you will have to pay a specified amount towards a claim, and the insurer will then pay the rest. This should have been made within your insurance policy as well as when you signed/agreed to the insurance policy.
Informing your insurer when claiming
You should get hold of your insurer prior to spending any monies that you want to claim on your insurance policy. If it’s an emergency and this is not possible then you can agree to have works done, but this is a risk and as soon as you can you should contact the insurer and explain.
Reasonable terms and conditions
All the terms and conditions must be reasonable within the policy. All financial products follow the principles of being fair and reasonable. If you think that the terms are not fair and reasonable then you have the right to challenge these – you should do so by complaining via resolver.
Insurance contracts will have a cooling-off period, typically 14 days. This happens after you sign/agree to an agreement or after you automatically renew your agreement.
Most insurance policies will auto-renew, to ensure that you are protected. If this happens, then the firm should have contacted your prior to your renewal, typically three weeks before. Even if you have auto-renewed, you still have 14 days in which to cancel.
Paying up front or in monthly instalments
It is usually cheaper to pay in advance. If you pay monthly, the insurance firm may charge interest on the repayments. They are entitled to do this, but you should expect the extra costs to be reasonable.
Making a claim
When making a claim on your insurance policy, ensure you have as much supporting evidence as possible. If applicable, take photos or videos with your phone and store these as evidence, as well as any emails or written documentation. Use Resolver to store and manage your claim, so that if you cannot resolve your issue then you have a complete case file to send to the Financial Ombudsman Service.
Claim rejected/too low
If your claim is rejected or the proposed payout is too low, then explain why you feel this is the case. If, for example, it is below the market value, then you need to find out if your policy has a new-for-old clause where they will replace any item with a new one.
If, however, you have a replacement policy, then you can only expect a replacement or money based on the age of the product; this means the payout could be below what you bought it for or what you feel it is worth.
If you are dissatisfied and cannot resolve the issue, then raise our case with the Financial Ombudsman Service. If you need to take the payment, then accept the payment but clearly explain this is accepted under duress and that you intend to challenge the decision.
If the firm goes out of business
If the firm goes bust, then you should contact the Financial Services Compensation Scheme (FSCS) who are able to assist in resolving any money that you may be owed.
If the issue is not resolved
If the issue is not resolved then you have the right to escalate your case to the Financial Ombudsman Service. The Financial Ombudsman Service will only accept your case eight weeks after you’ve raised the issue as a complaint with the insurance provider. Resolver will help ensure you have a fully packaged complaint to send to the ombudsman. The ombudsman will look at your complaint and determine if you have been treated fairly and also if their terms and conditions are fair and reasonable.
Any decision by the ombudsman is binding on the company, but only binding on you if you accept the decision.
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