Not upheld: Home insurance claim disputes complaint against Markel International Insurance Company Limited

Decision detail

Summary

Ms R complained that Markel treated her unfairly by declining to cover her legal costs on a legal expenses insurance policy. Markel initially rejected her claim as having no reasonable prospects of success, but when Ms R obtained a successful judgment, Markel reimbursed those costs. However, Markel declined to cover costs incurred after a set-aside application was unsuccessful, as the claim no longer had reasonable prospects. The ombudsman found Markel properly applied policy terms, acted reasonably in requiring a positive legal opinion from a qualified firm, and communicated clearly throughout. The complaint was not upheld, and the ombudsman noted Markel had already paid the balance of indemnity as a goodwill gesture.

The Ombudsman's reasoning

The ombudsman applied the policy terms which required that for coverage of costs when a claim was initially declined for lack of reasonable prospects, the claimant must proceed to judgment and be successful. Ms R met this condition initially and Markel reimbursed those costs. However, costs incurred after the set-aside application was unsuccessful fell outside policy coverage as the claim no longer had reasonable prospects of success. Markel acted reasonably in requiring a positive legal opinion before considering new claims and in setting expectations about solicitor qualifications and costs. The ombudsman found Markel provided clear information at each stage and acted fairly overall, including by paying the balance of indemnity as goodwill.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website