Not upheld: unfair application of excess fee on insurance claim complaint against Zurich Insurance Company Ltd

Decision detail

Summary

Mr H claimed on his buildings insurance for water damage originating from a neighbouring property above his. Zurich settled the claim but applied an excess fee, which Mr H disputed on the grounds that the damage was not his fault and therefore the excess should not apply. Zurich maintained the excess was a standard policy condition and sought legal advice about recovering it from the third party, but was advised recovery was unlikely due to lack of evidence of negligence. The ombudsman did not uphold the complaint, finding that the excess was a standard policy requirement and Zurich acted fairly and reasonably in its handling of the claim.

The Ombudsman's reasoning

The ombudsman found that paying an excess is a standard requirement on most insurance policies and was clearly stated in the policy terms and conditions. While sympathising with Mr H's frustration that the damage was not his fault, the ombudsman noted that insurance policies are designed to protect against unforeseeable events often outside the individual's control, making such circumstances not unusual. Zurich acted reasonably by making inquiries with solicitors about third-party recovery, and the ombudsman found no evidence that Zurich acted unfairly or caused unnecessary delays in handling the claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website