Not upheld: Home insurance claim disputes complaint against SCOR UK Company Ltd

Decision detail

Summary

Mr J held a combined insurance policy with legal expenses cover from SCOR starting in 2022. His property had experienced leak damage since 2008 from an unknown source. In 2023, the source was identified as a neighbouring property, and Mr J claimed on his legal expenses cover to pursue legal action against the neighbour for repairs and investigation costs. SCOR declined the claim citing a policy exclusion for events occurring before cover started and a duplicate cover condition. The ombudsman upheld SCOR's decision, finding the exclusion fairly applied because although the specific leak source was unknown until 2023, the underlying damage and the reasonable foreseeability of legal action existed before the policy commenced in 2022. SCOR's £300 compensation for processing delays was deemed appropriate.

The Ombudsman's reasoning

The ombudsman applied a two-part test to the policy exclusion: (1) whether the act/omission/dispute happened before cover started, and (2) whether the policyholder believed or should have believed a claim could arise. The first element was clearly satisfied as the leak existed since 2008. For the second element, the ombudsman rejected Mr J's argument that the exclusion only applies if the specific legal action and party were known beforehand. Instead, the exclusion reasonably applies where the possibility of legal action is foreseeable to resolve a pre-existing issue. The ombudsman found it was reasonably foreseeable that once the leak source was identified, legal action might be necessary to compel the responsible party to pay for repairs. This made the exclusion applicable and the claim properly declined.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website