Mouse made hole in my pocket

Our house insurance through Budget Insurance Services was due for renewal on 1 January. On Christmas Eve my husband caught a mouse that had chewed a hole in the armchair of our three-piece suite.

On 31 December we accepted the renewal quotation and asked for a claim form. I was told that because of the claim the premium would increase but was given the impression that, if the claim was disallowed, the extra would be reimbursed.

I was then told that our policy did not cover accidental damage by vermin and, worse, that the higher premium would remain because we suffered a 'loss' even though it was not one we could claim for. The original renewal quote was £182. After my phone call it was £205.
MG, Wigan

The lesson is to check what your policy covers before making a claim. Insurers log all claims, whether valid or not, and take this into account when setting new premiums.

Your policy excluded damage by vermin, which is standard. If you knew this, you would not have mentioned it and your premium would not have been affected.

I cannot understand the logic that allows an insurer to raise the premium when you have suffered damage that its policies do not cover. It makes as much sense as raising the premium because you have laddered a pair of tights.

Budget has listened to your taped conversation with the adviser, who was wrong to suggest there would be no penalty if the claim was invalid. To rectify the error, Budget has agreed to reduce the premium to the original quote.

Did I pay National Insurance in vain?

I returned to work part-time in 1965, after the birth of my daughter, and was told it was not worth paying the full National Insurance stamp. No mention was made of the loss of entitlement to basic state pension. Only when I realised the implications in 1990 did I elect to pay the full rate but it was too late to qualify for the full pension. My husband, 61, has paid full-rate contributions since 1958.

Is the state pension I receive a dependant's pension, in which case the seven years when I paid full stamp counts for nothing? When my husband retires, will the couple's pension replace the one I currently receive? If so, will it be split between us or paid to my husband?
GH, Newark

A woman with fewer than 10 years' National Insurance contributions is not entitled to a state pension. As you are receiving ?36.88 a week and your husband has not yet retired, perhaps you made full contributions before marrying because this is not a dependant's pension. When your husband draws his pension at 65, you can claim on his contributions to top up your pension to the married women's rate of ?45.20 a week. This is your money, paid to you and taxed as yours.

Age Concern's state pension factsheet 19 is helpful. Phone 0800 009966 for a copy. Steve Webb MP is seeing the Secretary of State for Work and Pensions, Andrew Smith, shortly with 1,000 signatures from people wanting an independent inquiry into the problems of women who paid the lower rate stamp. You can ask your MP to sign his early day motion 131 and you can contact Support Women Against Pensions Poverty at 30 Church Knapp, Wyke Regis, Weymouth DT4 9XZ.

Washer cover was a washout


In May 2000 my washing machine was repaired by a Servis engineer under my service contract. The following August Servis asked for a copy of the insurance certificate. In September it said the insurer, London General Holdings, disputed the validity of my policy, asked me to deal with LGH directly and to pay for the repair myself.

Servis later assured me it was being resolved and I thought that was the end of the matter until this January I received a third letter threatening legal action.
BMcM, Leeds

Initially Servis told me, too, that I had to speak to London General Holdings but at least LGH confirmed that you have a valid policy and, surprisingly, that the claim was paid last October.

Now Servis agrees that it should not have passed the buck. It explained that the insurer might reject claims without saying why if there was a slight difference in policyholders' details. By delving, Servis found it had your account number wrong. The file lay dormant for two years until late last year a Servis manager decided to chase invoices outstanding with the insurer.

LGH made a bulk payment without detailing which repairs it covered. Servis did not know whether your bill had been paid so chased you again in January. It has since tightened procedures and is sending you £50 to apologise.

'Low risk' fund made me a loser

When we retired three years ago and sold our business, our financial adviser told us to put £30,000 into Gerrard Low Risk Growth Portfolio. By last November, this was worth £11,168. If this is low-risk, I hate to imagine what high-risk is like. Now Gerrard is withdrawing the service for clients with under £30,000 and we have a month to take our money out.
SL, Bideford

Your money was invested in zero dividend preference shares which have been devastated by the collapse in split capital investment trusts. In October 2001 Gerrard stopped buying zeros for this portfolio, raised it to medium risk and switched clients who wanted to stay low-risk into a fixed-interest fund. You stayed.

Gerrard says it is closing the service to you because, as market conditions have changed, it cannot diversify a portfolio with under £30,000, even though this is the amount you started with.

Gerrard does not have a unitised fund so you have no option but to sell your shares. It is taking no commission but, by selling, you crystallise your losses and lose the opportunity of a possible recovery.

If you believe the investment was inappropriate in the first place, you should complain to your financial adviser.

· Email Margaret Dibben at money.writes@observer.co.uk or write to Margaret Dibben, Money Writes, The Observer, 119 Farringdon Road, London EC1R 3ER and include a phone number. Do not enclose SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.