Upheld: unfair claim handling, failure to make interim payment, disputed settlement amount complaint against Intact Insurance UK Limited

Decision detail

Summary

Ms J claimed on her group leaseholders property insurance policy following a water escape in February 2025. Intact accepted liability in June 2025 and established a liability amount of £10,100 based on its own repairers' costs, but declined to make an interim payment despite Ms J's requests, citing a significant difference between this amount and her own repairer's quote of approximately £29,000. Ms J complained about the handling and the settlement offer. The ombudsman upheld the complaint, finding that Intact should have made the interim payment once liability was accepted, as this is industry best practice. However, the ombudsman found the liability amount of £10,100 to be fair and reasonable, as it exceeded Intact's own costs and provided adequate indemnity. Intact was directed to pay the £10,100 plus 8% simple interest from 4 July 2025 to settlement, or alternatively complete the works itself.

The Ombudsman's reasoning

The ombudsman found that once Intact accepted liability and established a minimum amount it would pay (£10,100), it was industry best practice and fair to make an interim payment even though the final settlement amount remained disputed. Withholding payment unnecessarily delayed Ms J's reinstatement works. While Intact's concerns about the cost difference were understandable, it should have made the interim payment clear and allowed Ms J to decide whether to proceed. Regarding liability, the ombudsman found Intact's £10,100 figure fair and reasonable as it exceeded Intact's own costs and reflected a reasonable indemnity to put Ms J back in her pre-loss position, with disputed costs (furniture storage, alternative accommodation) not persuasively demonstrated as necessary.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website