Not upheld: unfair claim settlement and application of policy exclusions complaint against Admiral Insurance (Gibraltar) Limited

Decision detail

Summary

Miss B claimed on her landlord insurance policy for extensive damage caused by tenants, including damage to carpets, flooring, walls, and ceilings. Admiral made a partial settlement but excluded the majority of the damage citing a general policy exclusion for gradually occurring damage. Miss B complained that the damage was caused by direct malicious acts and should be covered in full, and that Admiral had acted unfairly by accepting some items while excluding others. The ombudsman found that while the tenants' actions were malicious, the resulting damage developed progressively through sustained saturation and repeated exposure over time, fairly bringing it within the policy's general exclusion. The ombudsman upheld Admiral's claim decision and settlement approach, directing only that an additional £200 for skirting boards and floor repair be paid if not already included.

The Ombudsman's reasoning

The ombudsman concluded that while the tenants' actions were malicious and unacceptable, the policy exclusion for gradually occurring damage focuses on how damage occurred, not the intention behind the act. The evidence showed sustained saturation and repeated exposure over time, with saturation penetrating through flooring into ceilings and mould development, which are characteristic of damage developing over a period rather than a single one-off event. The ombudsman found it fair for Admiral to apply the general exclusion to damage to walls and structural elements, even though some items were covered under accidental damage. The fact that Admiral accepted some items under accidental damage did not prevent them from applying the exclusion to other areas of damage.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website