Not upheld: unfair charges - policy excess deduction complaint against Allied World Assurance Company (Europe) dac

Decision detail

Summary

Mr B, a leaseholder, claimed under a multi-occupancy buildings insurance policy after water damage to his flat caused by a leak from the flat above. AWAC accepted the claim but deducted the contractual £500 excess from the settlement. Mr B complained that he should not pay the excess as he was not at fault for the damage. The ombudsman found that policy excesses are standard contractual requirements payable regardless of fault, and that AWAC acted fairly and even went beyond its obligations by exploring recovery options that ultimately proved unviable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that policy excesses are standard contractual requirements on buildings insurance policies and are payable regardless of who is at fault for the damage. AWAC correctly applied the £500 excess as specified in the policy terms. The ombudsman considered that AWAC went beyond its contractual obligations by exploring recovery options on Mr B's behalf, even though those options ultimately proved unviable due to lack of contact details for the responsible party and the fact that the source flat was owned by the policyholder.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website