Not upheld: Home insurance claim disputes complaint against Allianz Global Corporate & Specialty SE

Decision detail

Summary

Mr S claimed his light aircraft should be declared a total loss after an emergency landing revealed engine damage beyond repair caused by a fatigue crack in the cylinder piston. Allianz declined the total loss claim and offered a repair settlement instead, citing policy exclusions for wear and tear. The ombudsman upheld Allianz's decision, finding that the fatigue crack constituted wear and tear excluded under clause 1.2(a), and that the exception for single recorded events in clause 1.2(b) did not apply because the damage resulted from gradual mechanical failure rather than a sudden external event.

The Ombudsman's reasoning

The ombudsman found that clause 1.2(a) clearly excludes wear and tear and any consequent damage within a unit. A fatigue crack is wear and tear that develops over time through use, not a single event. The piston fatigue crack was the root cause of engine failure and consequent damage to other engine parts, all within the engine unit. Clause 1.2(b)'s exception for single recorded events does not apply because the fatigue crack occurred gradually over time within the engine unit, not as a sudden external event to the engine. Therefore, Allianz fairly excluded the claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website