A style conscious homeowner thought he had a £6,260 claim for designer suits and shirts destroyed in a fire sewn up until his insurance company sent round a fire investigator.
The investigator found threadbare evidence that the clothing had ever been in the fire – and because the homeowner fraudulently claimed for their replacement, he missed his complete claim.
The case was recently heard in the High Court and backed prior decisions that if any part of an insurance claim is fraudulent, the insurer can refuse to pay out on the whole claim.
In this case, homeowner Farid Yeganeh, of Chichester, took out £40,000 contents cover policy out with Zurich in October 2006. He was contesting the insurer’s decision not to pay out on his claim.
The policy conditions said, “If a claim is fraudulent or false in any way, we will not make any payment and all cover will end.”
In September 2007, Yeganeh’s home was damaged in a fire. Large parts of the roof collapsed on to the bedrooms below, the staircase was destroyed, and the hallway was partially destroyed. Downstairs rooms were badly affected by smoke and water damage.
Yeganeh submitted a claim for the reinstatement works, alternative accommodation, and contents including designer clothing, specifying the loss of seven Boss suits at £500 each and 30 Boss and Armani shirts at £92 each. Zurich requested documentary evidence for the purchase of these items and replacement clothing bought after the fire.
In December 2007, Yeganeh visited the property with a forensic expert appointed by Zurich.
Yeganeh explained the clothing had been stacked next to and on top of the bed in the master bedroom. After examining the scene for over an hour, the expert found no trace of the designer clothing, only some sports clothing, a pair of trousers and two velvet suits without labels.
Zurich gave notice that they were terminating the policy from the date of the fire, stating Yeganeh had dishonestly exaggerated his claim.
He instructed his own forensic expert to examine the scene, who found over 50 items of clothing which had not been identified by Zurich’s expert and the remains of a further 50, which had been so severely damaged they were no longer identifiable.
Zurich alleged Yeganeh planted this evidence after their expert’s inspection.
Under cross-examination in court, Yeganeh conceded that bank statements supporting his clothing claim related to money spent on bars and restaurants, civil enforcement agents, a hotel, a skiing holiday, a bank withdrawal and expenditure at Goodwood Club.
Genuine records for clothes amounted to £2,289.65 in 38 months. Apart from some handwritten receipts from one shop, there were no records for replacement clothing.
Judge Mackie QC concluded that the claimant was someone who was “casual about the truth”.
For example, he had included pine bedroom furniture in his claim that was later found in a shed.
Accordingly, the judge concluded that Zurich had established that the claimant had made a false clothing claim and the entire claim failed.