Questions Of Cash: Pensioner perplexed by £3,000 tree demand

Q. My mother's house is suffering from subsidence. In 2008 her insurers, Lloyds TSB, surveyed the property, deemed the movement "historic" and dismissed her claim. The cracks in the brickwork grew wider and in 2010 she commissioned a chartered surveyor to examine the property. He advised that the only solution was underpinning.

The insurers agreed to re-open the claim and their surveyor then reported that, upon re-examination, there was fresh movement due to shrinkage in the clay soil being exacerbated by the roots of a large oak tree at the end of the garden. They want this removed before any remedial work is undertaken, but insist my mother foots the £3,000 bill for its removal. There is no mention of this being an "exclusion" in the policy.

Lloyds TSB remains adamant that an 86-year-old widow living on a state pension has to pay for tree surgery that is not guaranteed to solve the problem and is in contradiction of the findings of her own chartered surveyor. KH, Reigate.

A. At our request, you referred back to the surveyor your mother engaged, who expressed "surprise" at Lloyds' expectation that your mother should have the tree removed and pay for this herself. He also confirmed his opinion that the tree is not the cause of the subsidence. Lloyds has now appointed a consultant to review the claim and the insurer's response. We are promised that this will happen quickly.

Q. I won £25 on a premium bond in June. The cheque from National Savings and Investments was paid into my NatWest account on 17 June. On 22 June, NatWest wrote to say the cheque had not been cleared – it had bounced. I was promised it would be represented. After 10 days I phoned and was told it would be represented immediately. After another 10 days I phoned again and was told the cheque had again bounced. I phoned NS&I, which said it had cleared their system. SG, Hampshire.

A. As you probably guessed, the error was with NatWest, which failed to clear the cheque properly. Our national finances are not yet in a situation where a £25 cheque drawn on the Exchequer should bounce. A spokeswoman for NatWest says: "We're sorry for the delay in [the reader] receiving cleared funds on this occasion. This was due to an error while processing one of his cheques." NatWest has credited your account with the missing £25, plus £50 compensation.

Q. My daughter has had her car insurance premium almost double on renewal to £800. She is a mature driver with 20 years' experience. She was the owner of a BMW 1.8D Sport, bought in 2007 from a main dealer when just a year old. It has been regularly serviced by them. In August last year in the early morning her car gave out an exploding noise and caught fire while parked outside her flat, and was destroyed. My daughter had to find the money for a new car and her premiums have jumped. She seems to have been shabbily treated. BG, High Wycombe.

A. It remains unclear what caused your daughter's car to spontaneously ignite, despite it being taken away for examination. BMW says it is normal procedure in such cases for a car to be investigated initially by the insurers, before passing it over to the manufacturer if the insurer believes there might have been a fault.

A BMW spokeswoman says: "The fact the insurance company never contacted BMW means they did not think the fire was caused by a manufacturing fault. If they did, they would not have agreed to pay the claim and would have insisted BMW take the cost." BMW subsequently agreed, at your daughter's request, to examine the car, but because it had been stored by the insurer outside, its condition had deteriorated and a proper examination was not possible.

A spokeswoman for your insurer, Elephant, says: "Due to the extent of the damage, neither ourselves or BMW were able to confirm the fire was caused by a manufacturer's fault." She added that the insurer had contacted BMW "on a number of occasions" over the incident.

Elephant says the premium rose from £621.85 to £878.34 at renewal – an increase of just over 40 per cent – because of a change in vehicle and address, as well as your daughter's loss of no claims bonus. While Elephant accepts she was not responsible for the fire, such incidents are still recorded as "fault" claims.

The insurer says its claims handler followed correct procedures, but accepts it could have "communicated better" and dealt with the claim quicker. On this basis, it will reinstate your daughter's two years' no claims bonus and reduce her premium for this year to £756.44.

Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: questionsofcash@ independent.co.uk.