Client: Property Investment Company
Size: 250sqm (2,690sqft)
Services: Insurance Reinstatement Cost Negotiation
Sector: Commercial and Industrial
Value: Insurance payout increased by over 30%
Following a fire at a pub, the owner made a claim on the insurance. The insurers responded by stating the building was under insured. The insurer’s loss adjuster was of the opinion the property was insured for just 40% of what it should have been covered for. The insurers offered 40% of the cover, amounting to less than £60,000.
Dabinett entered into negotiations with the loss adjuster and their surveyors. The crux was arguing the sum insured was not as low as suggested. It was low though, but there was scope to argue it was closer than being proposed.
Simply applying average costs per square metre wasn’t appropriate and the cost returned was too high. Therefore detailed element by element costs was completed, with several hundred lines of costs and descriptions of work.
After several months of negotiations, with a variety of drafts of costs and clarifications, a settlement was reached. The initial payout of circa £60,000 was increased to over £80,000.
It was accepted the building had been insured for less than it should have been, but the margin between the realistic rebuild cost and the insured sum was closer than first thought.
The job reinforced the need to be sure properties are insured for the correct sum. However, it also confirmed there was the scope to negotiate with an insurer and insurers are flexible and will, when faced with a strong argument, change their minds.