Case Decision reference – 2021 – 0155
The complainant noticed seeping which caused discoloration in a bedroom ceiling and discovered what they believe to be a wasps nest and they wanted to make an insurance claim. The complainant contacted the provider through their loss assessor. Upon inspection the loss adjuster claimed that it was a wasp’s nest that was present, and that the complainant would not be covered under their policy as wasps are vermin. The provider declined indemnity as it claimed wasps are vermin, after the loss assessor clearly stated that there was no correlation between the definitions of vermin and wasps and subsequently wasps nests.
The provider notes that wasps could be classified as vermin, sourcing the Cambridge English dictionary. They also claim that it is known wasps may build their nests in hollows in walls and attics, and may cause damage to a plasterboard ceiling over time. The provider states that wasps are classified as vermin due to the damage they cause.
The provider contends that wasps are vermin and therefore rejected this claim.
The FSPO noted that the complainants claim was declined under the term of the policy, “We shall not be liable for: wear and tear”, and undernoted vermin as an aspect of wear and tear. Upon considering the opinions of both the loss assessor, and loss adjuster, the FSPO noted that they are cognisant of the provisions of the Financial Services and Pensions Ombudsman Act 2017, which states “the Ombudsman, when dealing with a particular complaint, shall act in an informal manner and according to equity, good conscience”
Through strict contract interpretation the provider was entitled to decline the claim. The FSPO however takes the view that it was highly unlikely that during the time of inception, the policyholder was aware that damage caused by wasps would be excluded based on the definition of vermin. The FSPO noted that the providers loss adjuster needed clarification from provider as to if the word vermin covered wasps.
Per the consumer protection code 2012, the requirement under chapter 4 states all information it provides should be clear, accurate, and up to date. The FSPO notes that the provider assessed the claim under accidental damage, and declined the claim on the basis of what the term vermin means within the policy. The FSPO found that absence of the definition of the word vermin is very confusing, and that any number of parties may have different definitions for the word vermin. The providers own loss adjusters sought clarity as to whether wasps fall under the term vermin. The FSPO also found it inappropriate for the provider to introduce the word pest when it doesn’t appear in the relevant exclusionary clause.
The FSPO are of the view that the provider should review the wording of its exclusionary clause in order to give the policyholders a better understanding of the terms within the policy. This claim was upheld as the FSPO states, “I find that it is appropriate to uphold this complaint that the Provider wrongfully declined the Complainant’s claim in reliance on the particular exclusionary clause”, this was based on the policies mentioned above.