I had a house fire in 2000. This document is a record of what happened and suggestions based on my experience.
When the heat permeated their boots and socks, the chimney sweeps realised that the house was on fire. The front door was open, they stomped in and tried to use the phone. A sign next to it told them they had to dial 1 to get an outside line, but they didn't read it.
Fortunately, I was working from home when I heard the commotion and called the fire service. They took 12 minutes to arrive. The fire alarm went off a few minutes after they arrived.
I had already ushered the wife and kids outside the house. I had followed instructions and not paused to pick up anything along the way.
While waiting for the fire engines, with the help of the sweeps, we had pushed/driven the cars out of the garage, retrieved the pet cockatoo and dragged the 4 X (45Kg) gas bottles away from the house.
Three engines turned up and another appliance to supply food to the firemen. They were there for hours because the main fire was under the roofing iron. They had to climb the hot roof and make holes to stick their hoses in. One fireman was injured as his ladder fell backwards.
They soon ran out of water. We were on a rural property. The water being sprayed was collecting in our water tanks. So, the firemen reused that water. The majority of the damage was actually caused by the firemen and the boiling, caustic water getting sprayed everywhere.
The first floor (not the ground floor) was totally gone. The flames had started burning the ceiling, in places, on the ground floor. All visible copper pipes had exploded and twisted as the water inside had vapourised.
The assessor from State Insurance arrived in the afternoon. He made three statements (more on them later) -At a time like this you find out how friendly your neighbours are. Three of them offered us their house keys. We moved into one of the neighbour's house. Late at night we suddenly realised that we needed infant milk powder for the one year old. All shops were closed by then and my wallet had burnt in the fire. So I went over to the burnt house with a torch and managed to find tins of infant milk powder (all sooted up).
The next morning, the fire restarted and the fire appliances had to come back.
When the fire is raging, you think they will extinguish it soon and you can get back in, in a few weeks time. It takes days to sink in that you have to survive a whole year before you can get back to your house.
We were not traumatized by the fire. But we were traumatized by by both the Insurance Companies.
The Insurance Council of New Zealand has a Voluntary Fair Insurance Code [1].Yet on the day of the fire, the Assessor comes in and after just one glance says "You are under-insured".
In New Zealand, contents insurance also covers carpets, drapes, light fittings, above ground pools etc. Crazy, yes, because you don't take them with you when you move. Basically, anything that is not bolted down is contents. Therefore you all are under-insured.
Some of you will have replacement cover. Most people grossly under-estimate what the current values are, and hence the total.
What happens if you are under-insured? Say you have two couches, but the total insurance value only covers one couch. One couch gets damaged. The Insurance Company will say that they have been carrying the risk of two couches and is going to pay for half the couch!
Every two years, walk around and list all the items. Take photos of anything more expensive than $500 and price it realistically. If you are not sure, over-estimate it, the premium will not increase that much.
In our case, the outside was damaged by the firemen and builders (not the fire itself). Yet it was not covered.
A child car seat was in the attic and got destroyed. Guess anyone? It was not covered because it was part of the car insurance and the car was not damaged. When I protested, they asked me to lodge a claim under the car insurance. The subtle point here is that there is yet another excess to pay. Basically, the insurance companies will try everything possible to get out of paying you.
All is not lost as these things are theoretically covered by the chimney sweeps Insurance policy, because they started the fire.
Loss of income is not covered. With 3 kids and a pregnant wife, I had to take many days off work (more later). Theoretically this can be claimed from the other Insurance Company.
As for the extra petrol usage - you can try claiming it from the other Insurance Company.
So If State spend $400,000 in repairs, Vero would pay State only $200,000.
This affects you in many ways -
What is the problem with this ?
Only some lawyers/solicitors will handle insurance cases. Between Vero and State, they had every such lawyer on their retainer. Even the lawyer I had dealt with for 20 years, claimed "conflict of interest" and refused to act for me.
It is very clever tactics, but I wouldn't call it cricket.
Naturally, I bowed out. At that time, in New Zealand, lawyers were not allowed to benefit from the outcome of a case. That is, he could not have taken it on, on a commission.
Until the very last day (a year later), State did not admit liability. They were still looking for a way out!.
Some of the things that I know they tried -
These are some of the examples of what the Insurance Companies will normally do -
I figured this out. There wasn't much I could do about the house costs as it was going through the architect to the builder. But I could do something about the contents.
I insisted that I wanted to purchase the big ticket items such as whiteware and furniture myself. This is because I could get amazing deals (this part is true, I can). Here is the important bit -
If a fridge had an RRP of $115, the Insurance Company would pay only $60, but charge your account $115.
Now they had to come clean and admit that they get 40% plus off on major items. I would have received a discount of 15-24%. By admitting to this trickery, they still saved 20% as compared to my buying the items myself.
Insist that they hand over the sum insured to you and that you would buy the items yourself. And watch them squirm. Try and come to an arrangement about the price that is allocated to you.
This means that I would consider it reasonable that a toaster would last me 10 years. And that a Television would last me 15 years. These are not unreasonable figures as my parents in in-law owned these items and they lasted twice as long.
The insurance company is insisting that many items such as TV, Home Theatre System and Ovens were not damaged by the fire (and the corrosive water).
The argument I raised was -
Use the above argument and insist on a statement or that they replace the damaged items.
Yet they only provide you rental costs for 3 months. The total amount may be fixed or capped. The house policy covers you for 3 months and the content policy covers you for 3 months. But you can not benefit from two policies, so you only get 3 months. The remainder is claimable from the other Insurance Company.
When I was notified of this, I was livid. I told them that they had failed in duty of care. Since they knew it was going to take a year to build, they should have at least offered me an option of 12 months rental cover.
Once the rental payment from the contents had expired, I argued that the contents policy was no longer in force and I was not double dipping. Just for me, they agreed to re-interpret their policy and paid out for another 3 months from the house policy.
It is important to note that this amount is not additional, it's included in the total sum insured.
Insist that the Insurance Company hands over the entire sum to you (recall, you are under-insured). Then you can spend the money as it suits you.
The second statement from the Assessor was "Where is the ring?" My wife had an expensive diamond solitaire ring. I was honest and told them that she was wearing it.
The Assessor told me later, because of this, they believed other things I said later on.
The next morning (after the fire) I scratched the ground directly under where the Master Bedroom used to be and recovered the remnants of the other jewellery and handed it all over to them. I have to admit that I regretted this action later. They had not asked me about the other jewellery, so I could have kept quiet. But claiming for it would still have been fraudulent.
I had the fullest, replacement insurance that was offered to me for the house and contents. Naturally, I had assumed that all the contents came under this umbrella. But they had a long section of fine print. And the main exception is referred to as Sets and Pairs. Another is referred to as Like for Like. Some examples -
The heat was so intense that 3 feet above the ovens, china dishes had fractured. China / Porcelain is fired between 600°C and 1400°C [4]. For this to fracture, the temperature was up there. I requested that at the very least they get them serviced, they refused. Then all of a sudden replaced them. Apparently they had asked the builder and he told them, that surely they knew my reputation and I was not going to give up.
For the following items, either insist that they are replaced or that the Insurance Company provides a certificate from the manufacturer or supplier that states that "they are still going to honour the warranty as if the item had never been in a fire."
There are two types of policies for House Insurance - Nominated price or a price based on the area of the house.