FSPO – Decision Ref: 2018-0146 – Occupancy Clause
The Complainants are the Representatives of the Estate of the policyholder, who held an home insurance policy with the insurance company.
The Complainants Case
The policyholder died the same day a water leak was detected. The insurance company declined the claim on the basis the home was unoccupied as the policyholder lived in a nursing home and there was an occupancy clause on the policy. The insurance company advised that given the un-occupancy of the property and the discovery date of the water damage the company’s position may have been prejudiced as the leak may have been going on for some time.
The complainants states:
- The delay in notification was due to policyholder passing away.
- The property was occupied less than a week before the leak which satisfied the occupancy clause.
- The policyholder did not live in the house or occupy it but family did.
- No definition of occupancy appears on the insurance document
They do not agree that the occupancy means lived in and if it did it should be clearly on the policy. The complainants complain that the company wrongly or unfairly declined the policyholders claim.
The Insurers Case
The complainants are the Representatives of the Estate of the policyholder.
The insurance company appointed a Loss Adjuster. It was noted that on notification of the claim the policyholder’s home had been unoccupied for a considerable amount of time prior to discovery of the water leak and the occupancy clause was an issue.
The complainant claims that the home was checked on a regular basis. The Insurer states that a property being checked does not constitute it being lived in. The complainants provided the Loss Adjuster with an electricity bill for 2 months in the amount of €15.40 and for another 2 months in the amount of €13.16. Taking into account the standing charge, the Insurer was satisfied that this indicated that there was little or no usage of electricity during those months.
As a result of the un-occupancy of the policyholders home the Insurer reduced cover on the property to fire, lighting and explosion only.
The Insurer states if they were advised that the property was unoccupied prior to the incident, cover would have been reduced from the time the policyholder’s home was unoccupied. The Insurer notes that the escape of water peril does not operate while the property is unoccupied and that is the reason for occupancy clause. The Insurer considered that its position may have been prejudiced. It is a condition of the policy that the insurance company is advised of any material fact that is likely to influence the policy and failure to do so can result in the policy being cancelled.
The Insurer declined the claim, as follows:
“We understand that a leak was discovered from a water mains supply pipe under a concrete floor resulting in damage to sitting room carpet and a three piece suite. We note however that the property has not been occupied/lived in for 12 months approximately and as advised, the Escape of Water peril within the policy specifically excludes loss of damage occurring while the private home is unfurnished or unoccupied/not lived in for more than 45 consecutive days immediately prior to the loss or damage or 90 days whether consecutive or not in any one period of insurance. Moreover, the General conditions of the policy…confirm you must notify the company of any change which may affect the policy as soon as possible which you failed to do in this instance.
We must therefore, on this occasion, deny liability”.
The insurance company was satisfied that it declined the claim in accordance with the terms and conditions of the policy and the occupancy clause.
The FSPO accepts that it was reasonable for the Insurer to conclude that given the standing charges applicable to each billing period, that these amounts did not indicate that a person or persons were living in the policyholder’s home.
Recordings of telephone calls have been supplied in evidence. In the telephone call between Loss Adjuster and the Complainant the Loss Adjuster advised that the electricity bills show little or no usage of electricity which indicated that no-one was living in the property. The Complainant advised “I never claimed anybody was living in it.”
Definition as per insurance policy document:
Where the private home is not lived in by you or a member of your family or household or any other person who has your permission.
The FSPO accepts that the terms and conditions of the policy clearly provides that for a home to be occupied it must be lived in. From the recording of the telephone call between the Loss Adjuster and Complainant the Complainant advised “I never claimed anybody was living in it”. The FSPO accepted that the Insurer acted in accordance with the terms and conditions of the policy and the occupancy clause.
The Policy Document provides as follows:
“8. Escape of water from any fixed water or heating installation or domestic appliance
What is not covered…
- Loss or damage occurring while the private home is unfurnished or unoccupied for more than 45 consecutive days immediately prior to the loss or damage or 90 days whether consecutive or not in any one period of insurance”
The General conditions of the policy provides:
“you or any other person claiming under this policy must comply with the following general policy conditions to avail of the full protections provided by the policy. If you or any other person claiming under this policy does not comply with them, we may cancel the policy or refuse to deal with your claim or reduce the amount of any claim payment…
- Your duty
- You must advise us of all material facts when applying to us for insurance. A material fact is one which may influence us when agreeing to provide insurance or the premium we charge for example past claims or losses whether insured or not, criminal convictions or prosecutions pending, or medical history if applicable (these are examples and not a complete list). If you fail to disclose to us all material facts we are likely to treat your policy as invalid or not having existed or cancel it.
We will consider the policy to be invalid and not having existed if you do not truthfully provide accurate information or you fail to disclose any material fact when applying for cover. The answers and statements you provide in the proposal form and declaration or statement of fact and declaration must be true.
- You must notify us as soon as possible of any change which may affect this insurance. The whole policy or a section of it may be avoided or come to an end without you receiving any payment if you do not tell us of any changes that happen after the policy has started. In particular you must tell us…
- If the private home will be unoccupied for more than 45 consecutive days or more than 90 days in any one period of insurance”.
The FSPO accepts that the insurance company was entitled to decline the claim in accordance with the terms and conditions of the policy.
The FSPO does not uphold this complaint.