Direct Line left us homeless for two years

We have been homeless for more than two years thanks to Direct Line. In January 2014 we made a claim on our buildings insurance policy after a leak was found in our under-floor heating system. Direct Line’s loss adjuster instructed us to move out of our house for the remedial work to be completed.

We were relocated in May 2014 to temporary accommodation paid for by the policy. Unfortunately, the job turned out to be bigger than expected, starting a battle of wills between the loss adjuster, Direct Line and us. A number of experts were called to assess the condition of our house. They confirmed additional work was needed, but the loss adjuster ignored the evidence and disagreed. In February 2015 Direct Line said it was not going to continue paying for our alternative accommodation and left us to pay the rent ourselves.

We complained to the Financial Ombudsman who, in October, ruled that Direct Line should appoint a surveyor to reassess our house and produce some recommendations, which would be legally binding on both sides. It also ruled that Direct Line should pay for our temporary accommodation until our house was habitable. It was a moment of relief for us, as our family has been financially impacted by having to pay both rent and mortgage for nearly a year, in addition to the stress of not knowing what would happen to our house and when we will be able to move back.

But Direct Line has ignored both the surveyor and the ombudsman. It has decided to pay for only part of the work recommended in the reassessment and to restrict our accommodation costs to a five-month period, regardless of whether our house is fit to move back in to at the end of it.All this defeats the purpose for which all of us naively buy insurance, to have peace of mind. JM, Bromley, Kent

Insurers are notorious for trying to wriggle out of claims, but your experience is a particularly depressing illustration of big business. Shortly after you wrote to us, Direct Line tried to close your case by placing £43,000 in your account against your wishes to cover a limited period in your alternative accommodation and the rest of the works. This is less than half the estimated cost of the renovations. The ombudsman reopened your complaint and Direct Line said the fault lay with a single member of staff who ignored the ombudsman ruling. It has now dispensed with the loss adjustor and agreed to fund all the works recommended by the surveyor and your temporary lodgings for the duration. It has also refunded you the months of rent you had to pay, added 8% interest and awarded you £3,000 in goodwill – modest given the long period of stress and expense you have suffered.

“Unfortunately, our normal procedure was not adhered to, so the claim will now be proactively handled by our specialist large and complex loss team,” says a spokesperson. “We have contacted the FOS [financial ombudsman service] to explain that we have accepted their decision and have apologised for our previous error.”

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