The Cash Settlement – More Unscrupulous Behaviour from NFU Mutual

When we received our latest response from Lindsay Sinclair, the Group Chief Executive of NFU Mutual about our second complaint, something didn’t look right. When I looked into it, I found more unscrupulous behaviour from the NFU Mutual.

Just to update you, we’re three years through our claim and about to take our third complaint to the FOS (Financial Ombudsman Service). NFU Mutual, at the last minute, decided to separate the cash settlement from the original complaint about workmanship and delays. Something else to look into!

In the letter, this little, insignificant comment was slipped into a sentence about something completely different. It looks quite innocent in itself, but the implications are far from innocent. The comment is:

‘…you wanted NFU Mutual to consider a cash settlement’.

I didn’t think much about it at first, but I noticed it as a bit of an anomally as we didn’t ask for it. So in my next phone call to the FOS, I mentioned it to the case handler. She explained to me how things work and the reason why it was better for NFU Mutual if we had asked for it. It soon became very clear what an underhanded and dishonest game they are playing.

If the Insurer Offers a Cash Settlement

There is a huge difference in the amount of responsibility, and the amount of the cash settlement depending on who asked for it.

The FOS website has a page explaining settling claims for businesses. It says:

You can settle the claim with a cash payment whether or not something can be repaired or replaced. If you choose to do this, the amount should reflect the cost to the customer of getting a repair done or replacing an item. 

The amount should also be enough to put them back in the position they were in before the loss or damage.

You may decide to pay the customer cash to settle the claim and allow the customer to make their own agreements for repair or replacement. The settlement amount might be what you would have paid for the repair or replacement. This could be a lower amount than the amount the customer would pay by making their own arrangements if you have an arrangement allowing you to get things repaired or replaced for less than market rates.

But if the cash offer reflects the cost to you, that won’t indemnify the customer. This is because they won’t be able to get the repairs done for that amount. So if you’re choosing to settle by cash, we expect you to take into account the cost to the consumer.

In simple terms, this means that if the insurance company offers a cash option, they have to give enough money to put the house back to how it was before the problem. This could mean that they would have to pay more than if they were to do the works themselves.

If the Insured Asks for a Cash Settlement

However, it’s a different story if the customer insists on a cash settlement. The FOS website says:

If the customer insists on a cash settlement, you can’t force a repair or replacement on them. So you must pay cash to settle the claim. But you’re only required to pay the customer the cost to you of the repair or replacement you were offering to do, which might be less than the cost to the customer.

If that’s not enough for the customer to get repairs or a replacement, that’s fair, because you gave the customer the chance to be indemnified but the customer didn’t take it.

But we must be satisfied that your offer to repair or replace was fair to begin with. If it wasn’t, then you haven’t actually offered to indemnify the customer and we’d consider your cash settlement offer unfair. You may mention the costs of using your suppliers to explain cash settlement figures, which is sometimes called the ‘limit of liability’.

If you look carefully at the two options, the difference is really obvious. By the customer asking for cash instead of asking the insurance company to do the works, the insurance company can save themselves money.

But is this fair? Yes, if the customer is fully aware of the pitfalls. But look at this from our point of view.

They’re lying about us!

We didn’t request a cash settlement. Lindsay Sinclair said in his complaint response letter that his third claims handler: ‘…sent an email to you on 24 April 2020, advising a cash settlement was possible’.

By his comment, this looks as though this was the first time a cash settlement was mentioned in the claim and it was us who asked for it. It wasn’t!

First Mention of Cash Settlement

In early January 2020, we received an email from the second claims handler working on our claim at the time. (This was before she was cautioned by the local council’s enforcement office for unauthorised work to a listed building and was quickly whisked away from our claim). She said:

I understand you and Mark are looking to carry out your own work on the property, it may be beneficial to issue you with a cash settlement to enable you to finish the property at your own pace and preference.

Second Mention of Cash Settlement

Then a few days later she sends another follow-up email. In it, she tells us that; our cottage is structurally sound, the conservation officer will be happy with the repairs, we will be able to move back after a few minor adjustments are made, and, if we refuse to move back we’ll have to pay rent on the alternative accomodation.

More importantly, in this ’email of lies’, she gives us an ultimatum. She says that we have two options:

  1. Continue with the builders. (Who damaged a listed building, didn’t carry out the repairs, didn’t follow the guidelines, lied to and intimidated me, and which, as Lindsay Sinclair states, did work which was: ‘clearly unacceptable’.) or,
  2. Agree to a cash settlement.

Do you see? It wasn’t us who asked for a cash settlement. First NFU Mutual suggested it as being ‘more beneficial’ to us. Then it was they who used it as the only fair option in their ultimatum. We had no choice but to take the money and do the repairs ourselves with new, honest professionals and builders.

Underhanded and Dishonest Tactics

How far will this supposedly trustworthy company go to save money? For the sake of a few thousand pounds, they’re prepared to lie and cheat us out of money which is rightfully, and now I think legally, ours. Why use such unscrupulous behaviour? This money, which would mean so much to us and the future of our listed building for future generations, is ‘peanuts’ to this huge multi-million pound company.

When I googled it – NFU Mutual has assests of £18 billion. Wow!

The NFU Mutual is not even a corporation where you might expect this sort of behaviour. A mutual company is a private firm that is owned by its customers or policyholders. They say:

It’s our mutuality which sets us apart. We’re owned by and run for you, over 900,000 members, and we work hard to protect your interests.

I wonder what their members and other policy holders think about these underhanded tactics? Is this how they ‘work hard to protect your interests’?

Unscrupulous Behaviour

‘Discover what makes our home cover so reassuring’.
A neighbour’s envelope containing information about NFU Mutual’s home insurance

Do they really need to lie their way out of paying a few thousand pounds? Do they really need to cheat their way out meeting their responsibilites and doing what’s right and fair?

Why such unscrupulous behaviour NFU Mutual?

Do you feel reassured by NFU Mutual’s home cover after reading this site?

I wonder what more unscrupulous behaviour I’ll find as I dig deeper into the ‘smallprint’…

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