Not upheld: claim handling, lost rental income coverage, cash settlement offer, requirement for electrical upgrades complaint against Liverpool Victoria Insurance Company Limited

Decision detail

Summary

Mr K claimed on his LV landlord insurance policy for water damage in April 2025. LV accepted the claim and paid six weeks of lost rental income but refused further payments, required Mr K to upgrade electrics at his own expense, and offered a cash settlement without providing a detailed priced schedule. Mr K sought reimbursement for the £1,500 electrical works, three months of lost rental income, and additional compensation. The ombudsman found LV acted reasonably in all respects: the electrical upgrade was justified as the system had safety issues unrelated to the water damage, the property was not unfit to live in as essential facilities remained functional, and the cash settlement approach was fair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that LV acted reasonably in requiring electrical works before commencing reinstatement, as the electrician's report from 2025 was more persuasive than a certificate from four years prior. The ombudsman determined the property was not unfit to live in based on the evidence, as cooking and washing facilities remained functional and bedrooms were not uninhabitable despite some damage. The ombudsman considered LV's cash settlement approach fair, as insurers typically only pay what they would have cost to do the works themselves, reflecting their preferential contractor rates.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website