Not upheld: adequacy of settlement amount for subsidence damage claim complaint against Liverpool Victoria Insurance Company Limited

Decision detail

Summary

Mr W claimed for subsidence damage to his home and chose to use his own builder rather than LV's supplier. He requested that LV pay for full removal of render on the front elevation to inspect for damage, and subsequently claimed the settlement was inadequate. After render removal revealed additional cracks, LV increased its settlement by £876. Mr W complained that this was insufficient and that LV should have paid for the render removal and reinstatement costs. The ombudsman found that LV acted reasonably in declining to reimburse these costs because Mr W was intending to remove and replace the rendering in any event as an improvement, and that LV appropriately recognized additional damage by offering the supplementary £876 settlement.

The Ombudsman's reasoning

The ombudsman applied the policy terms which state that where a customer uses their own tradesman, the amount paid will not exceed what LV would have paid its supplier. LV settled based on what its own supplier would have charged for reinstatement. The ombudsman found that LV acted reasonably in declining to reimburse render removal and reinstatement costs because Mr W was intending to remove and replace the rendering in any event as a holistic improvement. The ombudsman accepted that LV's additional £876 settlement appropriately recognized the additional damage revealed by render removal. The ombudsman found no evidence that LV's assessment of the lintel or music room ceiling was unfair, and noted that premium increases following significant claims are inevitable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website