Not upheld: unfair claim settlement complaint against Lloyds Bank General Insurance Limited

Decision detail

Summary

Mrs M claimed for two pairs of lost earrings under her home insurance policy with Lloyds. Lloyds offered £2,750 in vouchers (or £1,175 cash) but Mrs M was unhappy with the voucher restrictions and wanted a higher cash settlement to purchase second-hand replacements from a retailer that would not accept vouchers. The ombudsman found that Lloyds' voucher value was fairly determined by a specialist based on like-for-like replacement, that suitable retailers were available for redemption, and that the cash settlement was appropriately limited to Lloyds' supplier cost under the policy terms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Lloyds' policy terms entitled it to settle claims through its own suppliers and to offer vouchers instead of cash. The voucher value was fairly determined by a specialist based on like-for-like replacement specifications. Although the vouchers had limited redemption options, the ombudsman was satisfied that suitable retailers were available to obtain reasonably matched replacements. The cash settlement was appropriately limited to Lloyds' cost (reflecting supplier discounts) rather than the full voucher value, as permitted by the policy terms.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website