Maximising Your Cash Settlement – Property Insurance Claims
Receiving a cash settlement for an insurance claim can give property owners greater control over their restoration process. However, with this flexibility comes a series of important decisions and without the right knowledge, it can be overwhelming to figure out of how to best to stretch your funds.
According to figures from the Association of British Insurers, property insurance pay outs in 2023 were up 11% compared to the previous year. In the second quarter of 2024, a record £144 million was paid out for damage to homes caused by storms, heavy rain and frozen pipes – the highest quarterly total since data collection began in 2017.
With extreme weather on the rise, it’s important now more than ever to protect your property and ensure you understand the options available in the event of damage. Here, we’ll discuss the process of cash settlement and how we can help you make the most of your pay out.
In this article, we will cover:
- What is cash settlement of an insurance claim?
- When are you likely to be offered cash settlement?
- What is the process of being cash settled?
- What to do if you’ve been cash settled
- Why choose Rainbow Restoration when you’ve been cash settled
– Offering local branches, fair and accurate estimates & an efficient service
– Our free no obligation consultation
What is cash settlement of an insurance claim?
Depending on the extent of damage, value and complexity of your claim, your insurer may offer you the option of cash settlement.
Your insurer will assess the costs for restoring or replacing your property and its contents. Instead of providing restoration services, they will offer a financial settlement equivalent to the estimated restoration or replacement costs.
When are you likely to be offered cash settlement?
An insurer’s decision to offer a cash settlement isn’t based on a fixed rule; it varies depending on the company’s policies, the policyholder’s preferences and the specific details of the incident.
Insurers are more likely to offer a cash settlement when the damage to your property is minor and doesn’t pose any immediate health or safety risks. You may also receive a cash settlement if your contents are deemed beyond the point of restoration, known as Beyond Economic Repair (BER) in the insurance industry.
In some instances, policyholders may have a preferred supplier for restoration, be capable of handling the repairs themselves or may even choose not to restore their property or contents at all, instead opting to spend their pay out for other purposes.
Claims that are less likely to be cash settled are large escape of water claims, extensive fires and mould. These claims are more likely to pose an immediate risk to health, therefor the insurer is more likely to instruct a contractor to complete restoration works.
What is the process of being cash settled?
Before making a claim, you must have an active policy in place prior to any damage occurring. The insurer will then assess the risk through an underwriting decision, which determines the level of cover, premium to be paid and any applicable excess.
It is important to always read your policy documents in full, to understand your coverage and any exclusions that may apply.
In the event your property or its contents sustain damage, the first step would be to contact your insurer to file a First Notice of Loss (FNOL). This report provides a detailed account of the incident, including an overview of the loss, how and when it occurred and any initial evidence the policyholder can provide, such as witness statements, photos and videos.
The insurer will typically review the FNOL details and may send an adjuster to the property to inspect the reported losses. Your compensation will be based on how your losses measure against the terms of your policy and your insurer’s assessment of the damage.
With the technology in place to offer fair and accurate estimations, many individuals are happy to accept the initial offer provided by the insurer. There are some instances where the pay out offered does not meet the expectations of the policy holder: if you believe this applies to you, please read our article on Underinsurance and further guidance from the Financial Ombudsman.
What to do if you’ve been cash settled
Whilst a cash settlement results in a quick and streamlined resolution to your claim, many property owners may be left unsure of how to best utilise their funds. With the right guidance, you can maximise your settlement to achieve the best value for your money.
At Rainbow Restoration, we offer a free no obligation consultation to explore your options once you’ve been cash settled with your insurer. Your local branch will complete an initial triaging assessment and provide expert advice on the best solution for your needs.
Why choose Rainbow Restoration when you’ve been cash settled
Rainbow Restoration has been a leading national Disaster Restoration service supplier for over three decades. All of our technicians undergo rigorous training to the highest standards, so you can trust your property is in safe and knowledgeable hands.
We have a variety of accreditations, including ConstructionLine Gold, ensuring we remain up to date with the newest techniques and best practices within the Disaster Recovery Industry.
Our work is guaranteed for 12 months, giving you peace of mind that we’ll get it right first time.
We guarantee our restoration work as we are confident it is built to last. However, in the unusual event that any issues arise, we’ll be on hand to resolve the problem to your satisfaction.
We are a trusted partner to leading insurers due to our long-standing reputation in the industry. With an unparalleled variety of services offered at every local branch, we’re your one stop shop for all your restoration needs.
We care for our customers by delivering a hassle free, all inclusive solution – because here at Rainbow Restoration: We Restore, You Recover.
Why is Rainbow Restoration Insurance Industry Approved?
In 2022, we embarked on a renewed vision prioritising customers who value Value, People, Planet and Speed. In line with this, we’ve committed to championing these values in every service we offer and job we undertake.
But how does this apply to our Cash Settlement service?
Local Branches
At Rainbow Restoration, we choose to prioritise People as our customers are always at the heart of what we do. We understand that our customers want to be serviced by a local trusted trader, with extensive experience and expertise in every service that is provided.
With national coverage across the UK, we have a branch situated just 23 minutes from any postcode. Our branches are passionate about the areas they serve, committed to restoring their community’s lives and wellbeing.
Being just a short distance away, we cut down our Co2 emissions by reducing the amount of fuel needed for customer visits – benefitting both our customers and the Planet.
Operating since 1987, we have had nearly 40 years’ worth of experience restoring every type of damage or disaster. With our long-standing reputation, you can be assured you know who’s attending your property and the quality of work that will be done.
Many Disaster Restoration providers claim to offer national coverage, but this often means they rely on subcontractors to handle work outside of their reach. At Rainbow Restoration, all of our technicians and restoration services are provided in-house.
By avoiding subcontracting, we maintain high-quality standards and consistent performance across all our services. You can trust our expertly developed and standardised processes, no matter where you are in the country.
Enjoy the benefits of a leading UK provider combined with the personalised service of a local trader. With Rainbow’s technicians, you’re assured of reliable, professional results every time.
Fair and accurate estimates
Delivering enduring Value to our customers, we consistently provide fair and accurate estimates for effective and complete restoration. Our estimates are based on precise data input into the advanced CoreLogic platform, which generates calculations using the most current information available.
Opting for less reputable providers increases the risk of being taken advantage of, whether through inflated quotes, subpar work or unfulfilled promises. Avoid wasting your time with unreliable cash settlement cowboys.
With over 30 years of experience in the insurance sector, we are a trusted and reputable provider with extensive expertise in job pricing. We support thousands of claims each year with many happy customers.
Efficient Service
We understand that Speed is an important value that can make or break your claims experience. At Rainbow Restoration, we pride ourselves on being able to deliver a fast and efficient service.
Prompt attendance to the property helps prevent secondary damage that could worsen over time and mitigates any health risks that could arise from prolonged exposure to the damage. Whilst your insurer will assess your property to help prevent these issues in the first instance: if you choose an unreliable restorer after receiving a cash settlement, the responsibility typically falls outside their control.
By choosing Rainbow, you’ll benefit from faster service without compromising on quality, ensuring a quicker restoration of your home or business compared to other providers. With our nationwide coverage across the UK, we guarantee a swift response to your property.
Take advantage of our free, no obligation consultation today. Our national helpline is available 24/7, 365 days a year, so please do not hesitate to contact us on 01623 422488.