Dear Katie,
Our £1.5 million family home burnt down in a catastrophic fire last February, so myself, my husband and our two daughters are currently residing with my parents.
Needless to say, it has been an awful time for us.
On the day of the fire we notified our insurers, Tesco Bank, about the incident and our intention to claim under our home insurance policy.
We also explained that we were in the middle of substantial renovation work on the property, building an extension which was costing us a further £500,000.
We had many calls with Tesco Bank as it investigated our claim over the following months.
In April last year Tesco Bank told us that senior underwriting and senior claims management, who were aware of the building work, had recommended settlement of our claim.
The paperwork was going to the chief executive for final approval, we were told.
But eight working days later, Tesco Bank declined cover. It said that we should have told them that we were carrying out building work when we renewed our policy and, if we had told it, it would have voided our policy.
As you can imagine we were completely devastated, and outraged.
We made a Subject Access Request (SAR) and were able to find numerous internal documents in which Tesco say that they would have continued cover if we had let them know about our building works when they commenced in August 2022.
The SAR also revealed the rude and disrespectful way in which staff were talking about us after lodging our claim, which felt like rubbing salt in the wound.
At one point they were laughing over a photo of our burned down home saying things like “I bet this has aged her a few years”, and joking that it must have given me grey hair.
At other points they questioned my intelligence, gossiped about how we were able to afford such an expensive house. It was all so unprofessional and disrespectful.
We followed the proper channels and complained to Tesco Bank in July last year, setting out in detail all of the reasons why our claim ought to be covered.
We received a “final” decision from Tesco in September maintaining its position to decline cover. However, at the same time it invited us to engage in an “alternative dispute resolution” process to reach a settlement.
This culminated in a mediation but unfortunately, we were unable to reach a resolution.
We have been without a home for almost 15 months now and do not seem to be getting anywhere with Tesco Bank.
-Anon
Dear reader,
These exceptionally rude Tesco Bank staff have been wondering how you can afford such an expensive home.
Even though it was absolutely none of their business, I’ll happily lay it out for them here: you and your husband are both in your forties with successful careers, which you’ve forged through hard work, grit, and determination.
Having slogged it out for over two decades, you pooled your resources to buy this fantastic 4,000sq ft arts-and-crafts-style period property, which you beganto renovate into your dream forever home.
This was a major achievement and you were, quite rightly, very proud of yourselves.
The unexpected situation you have now found yourself in is absolutely devastating,and my heart goes out to you all. Never in a million years did you think that the fruits of yourlife’s work would end up being an uninsured, burned out wreck, with you all camped out at your parents.
You are the first to admit that your biggest mistake in all this was not informing Tesco Bank about the building work before it commenced.
Anyone undertaking structural work to their property must first inform their insurer, as it poses additional risks and therefore may affect their cover.
Under ordinary circ*mstances your builder’s liability insurance might have covered the cost of the damage, but in a further stroke of bad luck this was never an option to explore,because it transpired it had none.
One might have assumed you were up the creek without a paddle at this point, yet despite knowing you had failed to notify it about the builders, Tesco Bank appeared to assure you on multiple occasions that your insurance policy would still pay out.
You feel you were strung along for weeks on end until your case was finally referred up to the highest level for approval. This was apparently necessary because your building work cost more than £500,000.
It was then that the most senior people in the organisation who decided that had you informed it about the building work before it commenced, it would have refused to insure you because the building work was too expensive.
And on that basis, it said, your policy was voided.
However it invited you to mediation and presented you with an independent rebuild report estimating how much this would cost, and offered you a cash settlement based on this.
You sought two builders’ quotes to rebuild the property which were four times Tesco’s independent estimate. Tesco Bank then increased its offer substantially, but it was still less than half of your builders’ quotes.
I told Tesco Bank I thought the rebuild cost presented by its independent report was ridiculously low, and demanded to see it so I could scrutinise it.
However, Tesco Bank refused to show me because you have signed a confidentiality agreement with it regarding the mediation. This unfortunatelymeans I’m unable to properly assess whether what you’ve been offered is fair.
This is really frustrating for me because I think the handling of your case by Tesco Bank has been absolutely abysmal.
You have been through the worst time of your life and instead of being supportive, Tesco Bank has strung you along with false hope, insulted you behind your back, and fobbed you off with an insultingly low compensation offer.
At the end of the day Tesco’s decision seems to have come down to one thing: the fact that your building work cost slightly more than Tesco’s £500,000 threshold, includingVAT.
It strikes me that it could have shown a little leeway and chosen not to include VAT in its cost calculation. Instead it has chosen to take a hard line, which devastatinglyfor you, is tough to argue with because you didn’t notify it about the works.
I’m so very sorry that I haven’t been able to secure the level of compensation you were looking for here. If you choose to litigate as a next step, I wish you the very best of luck.
Your story is a warning shot to anyone planning building work on their home to first inform their insurer.
A Tesco Bank spokesman said: “We sympathise with the customers and recognise the impact of this event on their lives and family. This is a highly complex case and we’re continuing to work hard to reach a resolution with our customers.
“Our customers have acknowledged they should have informed us of their planned building work. If the extent and value of this work had been disclosed we wouldn’t have offered cover, and this is why the policy was later voided.
“Despite this, and given the circ*mstances of the case, we’ve made a significant cash settlement offer which we believe is fair and reasonable and which goes beyond the independently valued cost of reinstating the property to its previous condition.
“We also apologise for the inappropriateconduct of one of our colleagues when discussing the case with a third party supplier.
“This has been addressed internally, and we don’t believe it reflects the culture and values of our wider team or the positive feedback we get from most customers.”
