We have paid Bradford & Bingley about £600 a year for our buildings and contents insurance since we bought our little terraced house 12 years ago, and renewed again last April. We then got a call from the insurer out of the blue to say it was discontinuing the cover in nine days because its underwriters, Legal & General, had said it was “unacceptable” to keep insuring us.
We think it may be because we made two claims over the past four years to repair cracking caused by visible, but not overly serious, subsidence.
B&B said the terms and conditions of our policy allowed it to do this, but it hasn’t yet been able to direct us to where it says so. It even told us that no other underwriters were willing to insure us, which was really scary.
Also, on a practical level, we’re going on holiday and have very little time to arrange a replacement policy. CF, London, N19
We were as shocked as you. If you lie when making an application, or fail to disclose crucial information, then an insurer can terminate your policy. But we have never heard of one reneging on a 12-month contract part way through because it no longer wanted the risk.
In this case, B&B and L&G knew the status of your ongoing subsidence claims from 2013 and 2016 when it agreed to renew in April, so it could hardly say it was unaware of the risk. It’s telling that B&B could not point to the clause allowing them to do so.
We couldn’t find it, either. We reckon you would have an open-and-shut case if you complained to the Financial Ombudsman Service or call 0300 123 9 123.
Bradford & Bingley was carved up during the financial crisis in 2008, with much of it taken over by Santander. But its motor and home insurance business was bought in 2010 by BGL Group.
We urgently put your case to BGL and it backed down almost immediately. It told us: “An error was made in the way the claims were recorded. The cancellation notice should not have been issued and the subsequent communication was, regrettably, based on incorrect information. Bradford & Bingley insurance is sorry for any upset and Legal & General has confirmed it is happy to continue cover for the remainder of the policy term.” It has also agreed to make you a goodwill payment of £75.
L&G tells us your policy “will continue on the original terms”, adding that “we can confirm we will not impose any additional terms”, which we think refers to your subsidence claims.
We will be interested to see what happens at renewal. We would also be very keen to hear from other readers if they have had their insurance cancelled part way through by either B&B or L&G.
We welcome letters but cannot answer individually. Email us at [email protected] or write to Consumer Champions, Money, the Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number