Upheld: unreasonable claim rejection complaint against Advantage Insurance Company Limited

Decision detail

Summary

Mr and Mrs Y complained that Advantage Insurance Company Limited unreasonably declined their home insurance claim for underground pipe damage after a water leak was detected in May 2025. Advantage rejected the claim stating Mrs Y had not demonstrated what caused the damage to the underground pipes, requiring proof of an external identifiable cause. Mrs Y obtained a contractor's report concluding the damage was more likely caused by an external force than gradual deterioration, but Advantage maintained the report was based on assumption rather than confirmed cause. The ombudsman upheld the complaint, finding that the expert contractor's report sufficiently demonstrated accidental damage beyond the balance of probabilities, and that it was unreasonable to require excavation through the building's foundation to expose the leak. The ombudsman ordered Advantage to reimburse £1,870.58 in repair costs minus the policy excess, plus interest, and confirmed the £100 compensation for handling delays was appropriate.

The Ombudsman's reasoning

The ombudsman found that Mrs Y had demonstrated beyond the balance of probabilities that accidental damage to underground pipes had occurred, as required by the policy definition. The contractor's expert report, from an appropriately qualified professional, concluded the damage was more likely caused by an external force rather than gradual deterioration. The ombudsman considered it unreasonable to require Mrs Y to excavate through the building's foundation to expose the leak when an expert had already concluded accidental damage was likely, particularly given the significant upheaval and regulatory breaches such excavation would cause. Additionally, Advantage's trace and access cover would have covered the excavation costs, suggesting Mrs Y had mitigated costs by paying for repairs instead. The £100 compensation was deemed reasonable given the distress caused by Advantage's initial delay and claim denial, though some distress was inevitable given the circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website