The below is a news item from published by the Financial Ombudsman Service (FOS). Its worth noting and keeping in mind when handling a claim pertaining to clothing loss.
Its true that clothing is subject to a depreciation in value for purposes of settling a claim. However, the amount of the reduction is subject to the facts about the clothing e.g. how old, original value, etc. and to fair and reasonable judgement by the claims handler. This is yet another reason why policy holders should always appoint their own claims expert to handle sizeable claims.
This is article is further evidence and proof positive that Loss Adjusters are NOT fair and impartial in their claim handling activities. They work for the insurer, and any expectation that they will be fair impartial is naïve to say the least.
Consumer queries deduction for 'wear and tear' when insurer pays claim for damaged clothing.
A serious fire at Mr E's home resulted in extensive loss and damage. After instructing a loss assessor to investigate Mr E's claim, totalling more than £69,000, the insurer agreed to pay it.
Mr E was far from happy when he found the insurer had made a 'wear and tear deduction' of 66% for every item of clothing listed in his claim. He said many of these items were 'almost brand-new' and he asked the insurer to explain how it had calculated the degree of 'wear and tear'.
He also said it was his understanding that any cash payment should reflect the full replacement value of the damaged items.
We asked the insurer why it thought a 'wear and tear' deduction of 66% was appropriate in this particular case.
It told us it had based the deduction on the loss adjuster's judgement. However, it was unable to supply any evidence to support this.
The policy stated that if it was not possible to repair an item, the insurer would either replace it or 'make a cash settlement for the cost of replacement'. The policy also said that if a claim included items of clothing, the insurer would make an 'appropriate deduction for wear and tear'.
We accepted that the insurer was entitled to make a deduction for wear and tear. However, it was unable to justify its overall deduction of 66%. We said we thought this amount appeared excessive.
We upheld the complaint and told the insurer it should amend the amount it paid Mr E in order to reflect a 25% deduction for 'wear and tear'.
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