FSPO – Decision Ref: 2019-0107
The Complaint relates to the Insurers declinature of the claim made by the Complainant under his home insurance policy for an insurance claim and illustrates the necessity for prudent and practical advice when making an insurance claim.
The Complainants Case
The Complainant registered the claim for storm damage with his Insurance company. The Insurer appointed a loss adjuster to act on their behalf who carried out an inspection of the damage for the alleged storm damage. The loss adjuster formed the firm opinion that the damage was not consistent with storm damage. But was in fact due to wear and tear over time.
The Complainant has furnished a report prepared by a firm of architects which state that the damage is consistent with storm damage.
The Complaint is that the Insurer wrongfully declined the claim and the Complainant is seeking payment.
The Providers Case
The Insurer has declined to pay out on the basis that the damage did not occur as a result of an insured peril (i.e. it was not due to storm).
The Insurer has attempted to carry out further inspection of the damage, but the Complainant did not allow Insurers engineer to access the property.
Policy Terms and Conditions
The Complainant was furnished with policy terms and conditions in respect of this policy. The policy covered loss or damage arising from a number of causes, including “Storm or flood”, but excluded damage caused by reason of “any gradually operating cause”.
Section 7 of the policy (“Loss Settlement Basis”) prescribes that, provided the damage is covered under the policy, the insured will settle the claim in the manner explained in that section. Section 7 also places an obligation on the insured to “provide access to Your Home and facilitate an inspection, for Our Managed Repair Network of Building Contractors to quote for the cost of repair / reinstatement”.
Section 9 of the policy (“Claims”) notes the entitlement of the Respondent “to receive all necessary assistance from” the Complainant.
The Complainant registered the claim under the policy with his Provider via a telephone call. Where he explained that the property had suffered damage due to high winds. The Insurers appointed their own loss adjuster to act on their behalf who inspected the alleged storm damage. On foot of the loss adjuster’s inspection, the claim was declined on the basis that the damage was not considered to have been caused by storm damage, but rather it constituted damage due a “gradually operating cause” (and this was excluded under the terms and conditions of the policy). The Insurer issued a declinature letter to the complainant explaining that the policy conditions required the Complainant at his own expense to produce all necessary documents and information to support any loss. The letter noted that the Complainants own builder could not confirm what the cause of the damage was, and went on to explain that the policy was intended
“to cover you against unforeseen events including fire, escape of water, storm etc. It does not cover wear & tear or anything that occurs gradually over time. The reason for the declinature is that there is no evidence of an insured peril in operation (eg. Storm Damage) and no evidence has been provided to confirm the damage. Furthermore, we note under the Storm Peril your policy does not cover loss or damage caused by any gradually operating cause”
The letter also advised that as the cause of the damage in this instance, was specifically excluded, the Provider would not be in a position to consider payment of this claim.
2 years latter an architect appointed by the Complainant prepared a report which was submitted to the Insurer in which the architect outlined his opinion that the damage was “consistent with storm damage”
On receipt of this report, the Insurer carried out a review of the file. The merit of this claim was revisited when the Insurer advised the Complainant it would send an engineer to reassess the damage and its cause at their own cost. However, the complainant refused to allow the Insurers engineer to access his property. The Insurer advised that it required an engineer to inspect the damage in order to confirm cover under the policy.
The crux of the complaint was whether or not the damage to the Complainants property was caused by an insured peril storm or not. The loss adjusters report states it was not. The Complainant had an architects report stating the damage was consistent with storm damage.
The Insurer appointed an engineer to inspect the property for further inspection, but for unknown reasons the Complainant would not permit the engineer to inspect the property. The Insurer confirmed to the Complainant that it remained open to consider the claim in the event that its engineer would be allowed to access the property for an inspection.
The FSPO stated they are satisfied that the Complainants refusal to allow access to the engineer, was in breach of his duty under the policy agreement, to cooperate with the Insurers investigations, to enable it to assess the claim.
The FSPO does not accept that the Insurer acted wrongfully in refusing admit the Complainants claim. Any consideration of a claim required the Provider to assess the claim as appropriate to the circumstances. The FSPO state that the Insurer acted correctly in seeking to advance the matter by instructing an engineer to further examine the property, but the Complainant was unwilling to facilitate this process.
The FSPO does not uphold this complaint.