Tesco Refuse To Pay Flood Insurance Victim
Tesco was once the rising giant in the UK’s grocery sector. However, they are now under fire from various avenues including their recent disagreement with Mark Two kitchens coupled with their declining share prices. If that wasn’t enough, they are now being scorched by the Financial Ombudsman after their insurance sector has left a flood victim in the dark for almost 2 years.
Helen Gorrill’s house was flooded in Cumbria during 2012. She and her son have had no other choice but to sleep on their friends’ couches after Tecso’s financial services department did everything in their power to avoid paying her insurance claim even after the financial ombudsman had ordered them to pay up!
Mrs Gorrill’s house was flooded almost 28 months ago after groundwater rose from underneath. She took out a weighty £700 (per year) household insurance policy with Tesco bank, however, not a single penny has been paid and absolutely no repairs have been carried out. Mrs Gorrill is a successful artist and some of her work has been archived in New York at the Brooklyn Museum. In her words, Tesco have fought her claim in “almost a vindictive way” in order to try and limit the pay out that she deserves.
Problems started to arise in July 2012 – water began to rise from underneath the property following a recent groundwater flood (this is when the water table begins to rise after the ground becomes too saturated). Obviously, the property was uninhabitable. Mrs Gorrill was shocked when she put in a claim under her insurance policy and it was declined. Tesco’s argument was: “The water must have leaked from an appliance or been due to faulty workmanship.”
Tesco’s decisions to avoid paying have left the victim exhausted and massively in debt. Her son has also suffered a brain haemorrhage and he shouldn’t have to be sleeping on different sofas throughout the week. The financial ombudsman released a strongly-worded statement: “We have made it very clear to Tesco that this was a valid claim. We’re currently speaking to the senior management team at Tesco to establish what factors might be adding to the delay in resolving this matter. If we feel a bank or insurer has deliberately stalled or avoided carrying out our decision we will report it to the regulator as a matter of course.”
Mrs Gorrill’s case should be of interest to anyone who currently owns a Tesco insurance policy. It’s one of the worst cases of an insurance company trying to bully their customer into accepting a lower sum in recent years. The financial ombudsman’s decisions are supposed to be legally binding, therefore, it’s worrying that these huge insurers are just deciding to ignore it and not much seems to be being done about it.
An ombudsman spokesperson commented, saying: “We take a very dim view of companies that don’t abide by our decisions. It’s not for Tesco to interpret what it thinks it’s supposed to do when it comes to an ombudsman decision. Our decision makes it clear that we expect the firm to deal with the claim and we’ve made it very clear that we believe this is a valid flood claim and is covered under their policy. In addition, we also instructed Tesco to pay a considerable amount of compensation, £1,000, to reflect its failure to deal with this matter appropriately.”
A spokeswoman from Tesco added: “We have fully investigated the situation and offered Gorrill an alternative loss adjustor to manage her case. We take incidents such as these seriously and have taken steps to prevent this happening again. We have also apologised to Mrs Gorrill for the upset this caused her. Tesco Bank originally rejected the claim as we felt the damage was caused by rising damp and not a one-off weather event such as a flood. However, we accept the judgment of the financial ombudsman service and are complying with all aspects of the ruling.”
James Savery, 20 November 2014