Don’t invalidate your fire insurance policy.
It seems like a very strange case to me, but it shows how important it is to read the fine print as if you ignored the policy conditions, your policy could be invalidated.
In this case, it was a condition of the FIRE insurance that the SAFETY Alarm be maintained and monitored. Times had been tough for the insured and he let the security alarm maintenance lapse and since the ARC had not been paid for 6 months, they stopped monitoring the site.
Vandals broke in and set the factory on fire. It was a furniture company and suffered losses of over £ 750,000.
The case went to Superior Court, the judge had nothing but sympathy for the Directors of the Company and was not pleased to rule that, as was a condition of the combined insurance policy, the alarm should be monitored by an external firm. , the Insurers did not have to attend the claim.
Often times, there are conditions associated with the insurance policies we purchase that are directly related to risk. We need to make sure that our cars have valid MOT so as not to invalidate the policy. We are required to notify the insurance company if we get a speeding ticket, but oddly, in my opinion, you don’t need to tell them if you decide to take the Speed Awareness Course instead of paying the fine.
I just came across a case, now in front of the Insurance Ombudsman, in which an insurance company canceled the policy and returned all premiums because the policy holder had inadvertently exceeded the value of the ‘valuables’ within of your content insurance. They had insured the contents of his house for £ 60,000 but there was a clause stating that the value of valuables should not exceed 66% of it.
They had to take their daughter to the hospital and, while they were away, the thieves attacked, taking goods and damaging the property worth £ 70,000. In evaluating the claim, the loss adjusters calculated that the value of the valuables in the house exceeded £ 40,000. Claims would normally be “averaged” to reflect underinsured, but the insurance company in this case argued that underinsured voided the policy. As I said, this case is before the ombudsman as I write.
Returning to the case at hand, a fire insurance claim was dismissed as a security alarm and supervision was allowed to lapse. Our clients run a hotel and there is someone at the front desk all the time, so if the fire alarm goes off, there is always someone on duty to respond. We come to the moment when the annual contract with the ARC [monitoring station] it needed to be renovated. The Manger Hotel wanted to cancel it as it was considered an unnecessary expense. I told him that I agreed, but asked him to check with his insurers to make sure they had no objections. The Insurers confirmed; follow-through was a condition of politics.
Often in the insurance policy there is a clause that the fire alarm is maintained according to British standards. It would be interesting to know if a similar claim has been dismissed because the fire alarm has not been properly maintained.