Not upheld: Home insurance claim disputes complaint against Liberty Mutual Insurance Europe SE

Decision detail

Summary

Mr and Mrs S purchased a flat with an unregulated loft conversion and obtained building regulation consent insurance from Liberty Mutual. When selling the property in 2025, the local authority indicated a regularisation application would be required. Mr S submitted a regularisation application and instructed building works before notifying Liberty of the issue. Liberty declined the claim, citing both lack of enforcement action (the policy trigger) and Mr S's breach of policy terms requiring notification without unnecessary delay and prohibiting communication with the local authority. The ombudsman upheld Liberty's decision, finding no enforcement action had occurred and that Mr S's failure to notify Liberty before applying for regularisation breached policy terms and prejudiced Liberty's position.

The Ombudsman's reasoning

The ombudsman found that the policy cover was only triggered by enforcement action (Section 36 notice or court proceedings), which had not occurred. The local authority had only stated it would provide an opportunity to regularise before enforcement. Additionally, Mr S breached two key policy terms: he failed to notify Liberty without unnecessary delay of circumstances that may give rise to a claim, and he applied for retrospective building regulations consent before informing Liberty. This breach prejudiced Liberty's position by preventing it from providing guidance on immunity from enforcement and offering a letter of comfort instead. The ombudsman was satisfied the policy terms were adequately presented to Mr S.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website