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Insurance Policy Excess

FSPO – Decision Ref: 2018-0110. Disagreement regarding Settlement amount offered and the insurance policy excess.


The Complainants made an insurance claim under their home insurance policy due to a water leak. The loss Adjuster issued a settlement offer. The complainants representative queried if the policy excess had to be vouched in order for full retention to be released. The loss adjuster confirmed that in order for the full retention to be released the full cost of the agreed figure of the claim would have to be vouched, which includes policy excess. The retention was held and was 30% of the adjusted loss before policy excess was applied.

The Complainants Case

To allow a release of the retention of the claim settlement the provider requires the Complainant to vouch expenditure same value as the total settlement offer before policy excess is deducted. The Complainants say that they accepted the settlement offer but not the condition attached to the retention. Complainants dispute that they shouldn’t have to vouch the policy excess as this was an uninsured element of the loss rather than part of the claim.

The complainants say that it is not fair to require to spend monies that do not form part of the insurance claim. The complainants require confirmation from Insurers that they only need to vouch expenditure to an amount claimed less of policy excess.

The Insurers Case

The insurance company state that the insurance policy excess is always a stand-alone deductible which is applied to each and every claim relative to the insured peril. The insurance company also  state that the agreed value of loss is always an agreed figure before deduction of the policy excess. The Insurer feels the Complainants are trying to say the policy excess is an uninsured loss which is not correct.

Policy booklet defines an insurance policy excess as:

“the amount you must pay towards certain claims. This is shown in your schedule”

The insurance company is satisfied that the full amount of loss including policy excess needs to be vouched.

Policy wording that were included on the schedule:

“We will settle claims by either repairing, replacing or reinstating property or by making a payment or stage payment.

Under this policy stage payments can be made where a portion of the claim payment will be retained by us until the works are completed.

When these works have been completed and supporting invoices and receipts or any additional evidence we may reasonably request have been provided to us confirm the total cost incurred, the full agreed sum will be paid.”

The Insurer states that once it is provided with vouched documentation confirming that the Complainant  had incurred costs, it will review and will release the retention monies or a portion of it, if incurred costs are lower that the agreed loss.



The amount that was agreed is not disputed. The Complainants claim that the insurance policy excess is an uninsured loss which should be vouched. The FSPO does not agree with this as the policy booklet defines an excess as:

“The amount you must pay towards certain claims. This is shown in your schedule”

The excess is a part of the agreed loss which the Complainants must pay, this was made clear to the Complainants when they incepted the policy. The policy excess is an insured loss as its included in the claim. An excess is the part of an agreed claim which the Complainant must pay.

The FSPO does not uphold this complaint.