Not upheld: claims handling - undervalued settlement offer and claim progression delays complaint against Great Lakes Insurance UK Limited

Decision detail

Summary

Ms L claimed on her home insurance policy for flood damage in June 2025, several months after the November 2024 incident. Great Lakes appointed a loss adjuster and arranged multiple contractor visits over seven weeks, resulting in an initial cash settlement offer of approximately £15,000, which was significantly less than Ms L's own quotes showing costs of approximately £55,000. Ms L complained about the undervalued offer and the inconvenience of multiple visits. Great Lakes accepted the offer was inadequate and committed to further investigation, eventually identifying actual reinstatement costs of £38,632 to £46,358 plus VAT. The ombudsman found Great Lakes' handling was fair overall, with necessary visits and appropriate responses to complaints, and upheld the firm's offer of £500 compensation as reasonable.

The Ombudsman's reasoning

The ombudsman found that while the initial cash settlement offer was significantly undervalued and caused Ms L distress, Great Lakes' overall handling of the claim was fair and reasonable. The multiple visits were necessary to properly assess the damage and investigate Ms L's concerns about asbestos. Great Lakes responded fairly to Ms L's complaints by providing an unpriced scope of works for her review and committing to further investigation. Although Ms L experienced inconvenience and stress, the £500 compensation offered appropriately reflects the impact on her, considering that some distress was attributable to the flood incident itself and her prior dealings with the local authority.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website