Not upheld: claim settlement valuation and claim handling delays complaint against Lloyds Bank General Insurance Limited

Decision detail

Summary

Mr W and Mrs W complained about Lloyds' home insurance claim settlement following the loss of an engagement ring in April 2025. Lloyds offered either a voucher worth £8,595 or a cash settlement of £6,016.15 (both minus excess) based on its supplier's costs to remake the ring to the same specification. Mr W wanted to use his original jeweller and disputed the settlement amount, arguing Lloyds should pay the full insured amount of £7,000. The ombudsman found the settlement was fair under the policy terms, which allow Lloyds to base cash settlements on supplier costs including discounts, and found no evidence that only the original jeweller could meet the specifications. The ombudsman also found claim handling was reasonable and the £100 compensation for failing to respond to correspondence was appropriate. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the policy terms which allow Lloyds to settle claims based on supplier costs including discounts, and to offer cash settlements on a like-for-like basis. The ombudsman found the voucher offer of £8,595 was reasonable as it was based on the same specification as the lost ring and allowed replacement with equivalent quality. The cash settlement of £6,016.15 reflected what Lloyds would pay its supplier and was consistent with policy terms limiting cash settlements to supplier costs. The ombudsman found no evidence that only Mr W's original jeweller could make the ring to the required specifications. Regarding claim handling, the ombudsman found no unreasonable delays and considered the £100 compensation for the failure to respond to correspondence to be appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website