Insurance for large purchases (but not full self build insurance)

[gravelld]

As part of our refurbishment project we're going to have some big purchases, for example new windows and their installation.

 

This cost will be in the mid five figures. It is paid through the installer, who then orders the windows from the manufacturer. The deposit is paid according to the full cost including installation and they advised I don't get a receipt from the manufacturers, only the installers.

 

This makes me nervous - what happens if the installers go bust? I wouldn't have any kind of proof with the manufacturers that I have paid a downpayment.

 

The manufacturers are unlikely to go bust, they are one of the "usual suspect" 3G alu-clad manufacturers.

 

So it turned me to thinking about insurance - what sort of insurance do I need? The installer also mentioned something about using a solicitor, but that sounds like a lot of work...

[newhome]

The easiest way is to use a credit card to cover a small deposit, say £100, that for purchases will cover payments up to 30k under Section 75 of the Consumer Credit Act. You will need to ensure that the total invoice is less than 30k (potentially by splitting it into 2 transactions). If you do that I would suggest that the invoice dates aren’t the same. There are a number of companies that still won’t provide the ability to pay by credit card unfortunately but it does provide you with the best protection at zero cost to you. 

 

 

[Roundtuit]

Your trading relationship would be with the installers so I don't think the manufacturers would have any obligation to you directly, and I'd suggest that if things are going t!t$-up, there is nothing to say the installer will have made any payment to the manufacturer towards your order anyway.  'Section75' credit card protection might be the easiest way to get some security; break up the purchase in to chunks < £30k, and pay a deposit on a credit card for each?

 

@newhome: snap!

Edited May 1, 2019 by Roundtuit
Cross-post

[lizzie]

Its the usual way of doing it - payment via installers - and the credit card thing is again the usual answer.  Our window people would not take a credit card at all and so I had to pay them by ordinary bank transfer or find another installer.  Large amount of money on Internorms.  I must admit I was worried about it the whole time until we got the windows delivered some 5 months later.

[newhome]

Also research the company. How long have they been trading, how many dissolved companies have the directors been involved in? It won’t protect you but some due diligence before handing over a large sum of money potentially without being protected is always good practice. 

 

https://beta.companieshouse.gov.uk/

 

 

 

 

[gravelld]

Thanks very much, very useful. I didn't think to ask about CC as I just assumed they wouldn't take one, with the surcharges and all, or even have the means to take a card payment. But I'll give it a go.

 

8 hours ago, newhome said:

The easiest way is to use a credit card to cover a small deposit, say £100, that for purchases will cover payments up to 30k under Section 75 of the Consumer Credit Act. You will need to ensure that the total invoice is less than 30k (potentially by splitting it into 2 transactions).

 

So to make sure I understand this...

 

- Pay £100 of the deposit by CC
- Pay the rest by bank transfer

Then for each instalment do the same split, so long as each instalment is under 30k?

It's explained here: https://www.which.co.uk/consumer-rights/regulation/section-75-of-the-consumer-credit-act - I guess the only thing I'm a bit worried about in the process is the fact that "The goods or service you bought must have cost over £100 and not more than £30,000." (it's more than that) and how "potentially by splitting it into 2 transactions" works. I'll speak to them.

[newhome]

6 minutes ago, gravelld said:

Then for each instalment do the same split, so long as each instalment is under 30k?

 

No, not instalments, you need 2 completely separate orders each under 30k in total to make Section 75 valid. So maybe order the front windows separately from the rear. And as I mentioned, to avoid questions being asked split the order into 2 time periods. It may not be necessary but at least you can say ‘I was still considering whether to order the rear windows’ or some such to justify having 2 claims if (God forbid) you need the Section 75 cover. 

[newhome]

2 hours ago, lizzie said:

I must admit I was worried about it the whole time until we got the windows delivered some 5 months later.

 

And it’s not just cover for goods physically arriving, it should cover you for quality too, so you may have had backup for your window issues had Section 75 been available. 

 

https://www.resolver.co.uk/rights-guide/section-75-consumer-credit-ac

 

[lizzie]

2 hours ago, newhome said:

Also research the company. How long have they been trading, how many dissolved companies have the directors been involved in? It won’t protect you but some due diligence before handing over a large sum of money potentially without being protected is always good practice. 

 

https://beta.companieshouse.gov.uk/

 

 

 

 

we did all that...... I was still worried though. And yes on issues although they are with the fitting not the windows themselves.  

 

Windows and payment of large sums probably one of the most worrying elements of the build given the reputation of window companies (not the manufacturers but the the.middle men you buy through)

[newhome]

36 minutes ago, lizzie said:

Windows and payment of large sums probably one of the most worrying elements of the build 

 

Yes, I would agree with that. Things like kitchens too. 

[gravelld]

3 hours ago, newhome said:

 

No, not instalments, you need 2 completely separate orders each under 30k in total to make Section 75 valid. So maybe order the front windows separately from the rear. And as I mentioned, to avoid questions being asked split the order into 2 time periods. It may not be necessary but at least you can say ‘I was still considering whether to order the rear windows’ or some such to justify having 2 claims if (God forbid) you need the Section 75 cover. 

 

Thanks for clarifying.

[Grendel]

On 02/05/2019 at 07:37, gravelld said:

Thanks very much, very useful. I didn't think to ask about CC as I just assumed they wouldn't take one, with the surcharges and all, or even have the means to take a card payment. But I'll give it a go.

 

 

So to make sure I understand this...

 

- Pay £100 of the deposit by CC
- Pay the rest by bank transfer

Then for each instalment do the same split, so long as each instalment is under 30k?

It's explained here: https://www.which.co.uk/consumer-rights/regulation/section-75-of-the-consumer-credit-act - I guess the only thing I'm a bit worried about in the process is the fact that "The goods or service you bought must have cost over £100 and not more than £30,000." (it's more than that) and how "potentially by splitting it into 2 transactions" works. I'll speak to them.

 

....and it must be OVER £100, not exactly £100

there's also section 75a which covers payments up to £60,260 under certain circumstances.

It also must be for a single item, so 2 train tickets totalling £140 won't be covered

[Temp]

On ‎01‎/‎05‎/‎2019 at 22:55, newhome said:

The easiest way is to use a credit card to cover a small deposit, say £100, that for purchases will cover payments up to 30k under Section 75 of the Consumer Credit Act. You will need to ensure that the total invoice is less than 30k (potentially by splitting it into 2 transactions). If you do that I would suggest that the invoice dates aren’t the same. There are a number of companies that still won’t provide the ability to pay by credit card unfortunately but it does provide you with the best protection at zero cost to you. 

 

+1 to that. Just make sure you know the rules. The >£100 amount must be a deposit for the windows. If necessary pay another >£100 by CC for installation so both are covered by same CC company. 

 

Some companies hide in small print that the windows and installation are separate contracts. It may say they act as agents for the installer and your contract for installation may turn out to be with another company or even a subsidiary of the same company.  Subtle differences like this can invalidate a claim against the CC card co if the company that goes bust isn't the one you actually paid. If there is anyone "in the middle" of the transaction the card co may have a get out.   

 

[Temp]

It might be possible to ask the supplier for a "Performance Bond" but they will pass on the cost to you. You also need evidence they have paid and continue to pay the premium. I'm not very familiar with these and you might need legal advice to ensure the wording of the bond covers everything you need it to.

 

https://www.thebalancesmb.com/builders-guide-to-performance-bonds-844795

 

A performance bond will protect the owner against possible losses in a case a contractor fails to perform or is unable to deliver the project as per established and the

contract provisions. Sometimes the contractor defaults or declares himself in bankruptcy, and then in those situations, the surety is responsible for compensating the owner for the losses. Such compensation is defined as the amount covered under the performance bond

 

It says typical costs are 1-2%. That might mean the premium is too low to be of interest to providers on low value projects?

Edited September 6, 2019 by Temp

[Grendel]

Surely this has been an issue for everyone on this Hub who has self built???

Whether you are ordering a timberframe, or windows or other materials there is often a very big up front amount to pay.

Has everyone just bit the bullet and paid out with a bit of "checking" or is there a UK based way of covering the risk of a supplier going bust before delivery taking your money with them??

We are about to order an ICF system but feeling very anxious!!!!

[newhome]

45 minutes ago, Grendel said:

 

Surely this has been an issue for everyone on this Hub who has self built???

 

 

Yes it has and it’s the scourge of our system in the UK for large purchases. It’s a case of send the money and hope mostly. Sometimes you can negotiate a ‘payment on delivery’ arrangement but in many cases you can’t. 

 

You can put money in Escrow but I imagine there aren’t many companies that would agree to that either. We use Escrow arrangements at work for source code owned by 3rd parties. It gets released in the event that the 3rd party goes into administration. 

 

 

[gravelld]

As I replied in a PM to @Grendel I crossed my fingers and paid up... so far so good.

[Adam2]

Same story - have required window co to split the order into 3 with different reference numbers - they actually didn't moan about this so maybe I'm over-paying ?  When it comes to ICF order have gone with a large co that seems to be doing OK so fingers crossed when we pay that one out and then wait a while as I don't think they take cards. If using cards - we are using a BA Amex that earns you a companion flight ticket - other smart options exist so you get some value back from the card co. Though as mentioned earlier you don't have to pay the whole lot on the cards.