Do you know what your rights and obligations are when it comes to home insurance?
JULY 29, 2020

Home should be our anchor, our port and safe haven in a storm. For most of us it also means a significant investment, if not, our most substantial investment. And yet, when it comes to protecting this investment, we are not always fully aware of what we are covered and protected for.

When shopping around for a home insurance policy, we are often faced with technical jargon or a lack of information which renders our  decision to select the most suited product or service provider for our needs more difficult. The MFSA, as the sole regulator for financial services and products, is responsible, amongst other things,  for safeguarding consumers’ interests.   A gap was identified when it came specifically to awareness and information on home insurance covers and, to this end, an educational campaign informing consumers of what to look out for in a home insurance policy was launched. The campaign explained the difference between the Buildings Insurance and Contents Insurance policies, the type of cover each policy provides and what roles they play in the Home Insurance policy sector.

The MFSA’s NewsHub Team approached the Office of the Arbiter for Financial Services (OAFS) and asked about the extent of the Arbiter's input in matters relating to home insurance matters. The OAFS, based in Floriana, is an autonomous and independent body with the power to mediate, investigate and adjudicate complaints filed by consumers against financial services providers.

“Many homeowners may not appreciate that their biggest investment is likely to be their home. Regrettably, many simply terminate their home insurance policy the moment they repay their home loan in full," a spokesperson for the Office of the Arbiter for Financial Services remarked. "Unfortunately, that may be rather short-sighted because you never know what event may occur in the future, and for what your insurance is likely to cover you.”

From the nature of the cases escalated to the Office of the Arbiter for Financial Services it is clear that more consumers need to be aware that the sum insured by buildings policy is the cost of rebuilding and not the property’s market value.Refer to your policy for the definition of “rebuilding value” and ask your architect for a professional valuation based on such definition," the spokesperson suggests. "On the other hand, it is your responsibility to establish the value of your contents policy. Therefore, check your policy and establish how your insurer establishes the claims value for losses on contents. You need to draw up an inventory of your contents and keep it updated every so often. If in doubt, your insurer should guide you about establishing estimates for contents’ value."

Asked if consumers should provide photos to their insurers, the Office of the Arbiter for Financial Services  stated that “in the event of claim, and where applicable, take photos of the damages that have occurred. You may need to provide such evidence to your insurance company with your claim form. Download the claim form from your insurer’s website and refer to your policy document for any further information or documentation that you may need to lodge with your claim. Do not delay with informing your insurer with a claim, especially if there is suspected damage to third party property.”

The spokesperson of the OAFS told us that, “one should keep a copy of his/her policy handy at home. The “summary of benefits” is not the policy document but merely an outline of the benefits. You need to have a copy of the full policy document which describes the events that can lead to a loss and for which your policy covers you and to what extent, how losses are quantified, what events exclude you from cover and the claims’ and complaints’ process.”

He added that, “if your claim is rejected and you disagree with your insurer’s decision, you have a right to lodge a complaint with the Office of the Arbiter for Financial Services. But before you can do so, you are obliged to give your insurer the opportunity to look into your complaint. Set out your disagreement in writing, explaining why you disagree and how you expect the insurer to put things right for you. Insurers are required to provide you with their response in writing and within 15 working days from when they receive the complaint from you.”

What should one do if s/he disagrees with the insurer conclusions? “If you continue to disagree with the insurer’s position, visit the website of the Office of the Arbiter for Financial Services for a description of the complaint process ( Download, compile and sign the complaint form as indicated. Together with your complaint, you would need to provide a copy of your complaint letter to the insurer, its response and any other supporting documentation related to your complaint. Thus, besides attaching a copy of your policy schedule and policy, you may also attach a copy of any e-mail exchange you had with your insurer, a valuation of an article(s) that form the basis of your claim, or photos of the event. “

The OAFS’s website provides more detail about the complaints’ process. However, you may also get in touch with them by email ([email protected]), or dial Freephone 80072366 or Whatsapp 79219961. More information is available in the recently published 2019 Annual Report and Audited Financial Statements of the Office of the Arbiter for Financial Services which is available on their website and provides a comprehensive statistical and qualitative review of enquiries and complaints processed.