Upheld: unfair claim decline - escape of water damage complaint against Lloyds Bank General Insurance Limited

Decision detail

Summary

Mr S claimed for water damage in his bathroom caused by an escape of water in September 2024. Lloyds declined the claim based on reports from two appointed experts identifying failed sealant, grouting, and other maintenance issues causing gradual damage, which is excluded under the policy terms. After Mr S obtained a further assessment suggesting a leak from the shower control panel, Lloyds sent another assessor who gave conflicting information compared to previous reports. The ombudsman upheld the complaint, finding that while the claim decline was fair given the extensive maintenance issues identified, Lloyds should have clarified the conflicting assessor comments with Mr S, and ordered £150 compensation for the resulting distress.

The Ombudsman's reasoning

The ombudsman found that Lloyds fairly declined the claim because multiple maintenance issues and wear and tear were identified in the bathroom, making it impossible to differentiate what caused the specific damage. The poor general condition of the bathroom and proximity of issues to maintenance problems supported Lloyds' application of the policy exclusion. However, the ombudsman found that Lloyds' assessor gave conflicting information compared to previous experts, which should have been clarified with Mr S, causing unnecessary distress.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website