Fire Claims
Storm Damage
Flood Damage
Escape of Water
Value at Risk
July 22, 2013

Clearly the U.K. Ombudsman deals with a significantly larger amount of claims than its Irish counterpart. Irish Policies are written on the basis of the old FOC and recent ABI wording so the Terms & Conditions etc. are invariably identical. It is helpful and instructive therefore to consider cases recently reviewed by the U.K. Ombudsman as follows:

1. Claim rejected – was caused by poor workmanship

The Policyholder had a flat roof and following a heavy snowfall, water came through. The Policyholder suggested the Loss Adjuster wasn’t qualified to comment on damage and that as the roof was only a year old, it must have leaked due to the weight of snow.

The Ombudsman held that Adjuster’s Report was adequate and Adjuster was qualified to handle the matter and concluded that roof had not been constructed properly and the issue was one of defective workmanship which was not covered under the Policy and the Policyholder’s complaint was rejected (not upheld).

2. Claim declined due to Contractor’s bad workmanship

Policyholder’s house was flooded and repair works carried out and claim paid. Following a winter the house was damp and drafty. The Policyholder contacted the insurance company. Insurer pointed out that the Policyholder had chosen the Contractor themselves. Insurer would not accept any responsibility for further issues with poor workmanship. Policyholder complained to the Ombudsman suggesting that the Insurer had indeed instructed the Contractor.

The Ombudsman held that the Policy specifically excluded poor workmanship and saw from the claim papers that the Contractor was not instructed by the insurance company but by a claims handling company on behalf of the Insurer so the Ombudsman therefore decided the Insurer was responsible for the consequences of the defective workmanship and were instructed by the Ombudsman to pay for any repairs to put matters right.

This case is interesting from the perspective of Insurer’s exercising their option to reinstate under the Policy or in relation to “managed repair” schemes.

3. Insurer declines claim because damage was not caused by a storm

Policyholder lived near the coast and after severe rain his roof was damaged and water ingress occurred. Policyholder notified insurance company by phone and received a letter shortly thereafter rejecting the claim on the basis that there hadn’t been a storm in the local area and that based on the age of the roof the damage was more than likely caused by wear and tear. Policyholder complained to the Ombudsman saying that he had maintained the roof well and only noticed the leak after the exceptionally wet weather.

Ombudsman noted from weather report referred to by Insurer had been for a period several weeks prior to the incident and Ombudsman checked local weather reports and saw that there was “wind storm locally”. These weather readings were inland and Ombudsman took the view that weather conditions by the coast could be worse than those inland and decided that the weather had been severe enough to consider it as a single storm that caused the damage and instructed Insurers to pay the claim in accordance with the terms of the Policy.

4. Policyholder complains that Insurer’s delay meant that he had to move out for longer than necessary

This case has resonances of the Irish case involving AXA as featured in newspapers recently.

In the U.K. case the Policyholder’s house was damaged by flooding over Christmas. He phoned Insurers but nobody phoned him back. He went to stay with relatives over Christmas and then moved into a B & B.

In late January the Insurers sent a Contractor to start drying out but the Contractor arrived with incorrect equipment and came back mid February. The Policyholder was told it would take 6 to 8 weeks for the house to dry out. Over the following months there were more delays due to repair work. The Policyholder moved back to his house in July and complained to Insurers that the matter was handled badly and delayed unnecessarily. The insurance company agreed and offered to pay him Stg£500 but the Policyholder was not happy and referred it to the Ombudsman.

Ombudsman held that Policyholder had reported matter promptly to Insurer and feedback was poor. Ombudsman decided that the position was exacerbated by delays and that the Insurer had taken far longer than they should have. Ombudsman told Insurer to cover the full accommodation costs and to pay Stg£1,200 compensation for the inconvenience.

5. Policyholder complains her Insurer in relation to turned down claim for leak in garage

Policyholder noticed pool of water on the floor of her garage. Couldn’t establish where it had come from. Reported matter to Insurer – based on the Loss Adjuster’s report the claim was rejected as it had not been caused by an “insured event”. There was no damage to the building and nothing to repair per se so nothing to repair under the Policy.

Ombudsman explained to Policyholder that Policy covered certain contingencies and that Insurer had to be satisfied that it had been caused by one of these. There was no escape of water, there was no flood or storm damage, weather conditions confirmed some rainfall but not conditions that would constitute a storm. Ombudsman suggested that Policyholder contact a Surveyor to carry out further investigations but upheld Insurer’s position that there was no claim under the Policy.

6. Insurer rejects claim for storm damage because there was “no identifiable storm”

After a wet Autumn Policyholder’s flat roof leaked. The claim was rejected as no evidence of storm damage. Roof was old and damage caused by wear and tear but Insurer’s delayed letting Policyholder know the position. She had a number of conversations with people on Insurer’s helpline but it took two months to find out that her claim had been rejected and she complained to the Ombudsman. Insurers offered to pay Stg£75 for inconvenience but Policyholder rejected this.

Ombudsman listened to recordings of conversations between Policyholder and her Insurer and concluded damage had occurred in early December. Ombudsman checked weather reports which showed there had been heavy rainfall and Ombudsman took the view that a storm usually involves violent winds often with rain etc. As there had been only light winds the Ombudsman concluded that there had not been a storm locally. There was no accidental cover under the Policy. Ombudsman concluded that Insurer had acted fairly in that the offer of Stg£75 was fair compensation in terms of poor customer service.

Alan FitzGerald, FCII., FCILA., FUEDI-ELAE.

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