Partially upheld: unfair claim handling - dispute over causation of damage and settlement amount complaint against Lloyds Bank General Insurance Limited
Financial Ombudsman decision DRN-6196659 of 2026-04-27T00:00:00+00:00. unfair claim handling - dispute over causation of damage and settlement amount complaint against Lloyds Bank General Insurance Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6196659 |
|---|---|
| Decision date | 2026-04-27T00:00:00+00:00 |
| Firm | Lloyds Bank General Insurance Limited |
| Product | buildings insurance |
| Claim type | unfair claim handling - dispute over causation of damage and settlement amount |
| Outcome | Partially upheld |
| Remedy | Lloyds Bank General Insurance Limited must: (1) Settle the claim for the hallway carpets in line with the policy terms; (2) Pay Mrs T £1,200 total compensation for distress and inconvenience, less any compensation already paid. |
Summary
Mrs T claimed on her buildings insurance policy with Lloyds for water damage caused by a bathroom leak at her unoccupied property in August 2025. The dispute centred on whether kitchen damage was caused by the bathroom leak or a leaking fridge-freezer, with Mr T (acting on Mrs T's behalf) disputing Lloyds' settlement amount and scope of works. Lloyds' second surveyor concluded the kitchen damage was caused by the fridge-freezer leak, which was excluded as a gradually occurring maintenance issue. The ombudsman upheld Lloyds' decision based on physical evidence of standing water beneath the fridge-freezer and structural analysis, rejected Mr T's higher estimate as including unnecessary costs, but upheld inclusion of hallway carpets and confirmed £1,200 total compensation was fair.
The Ombudsman's reasoning
The ombudsman found that the kitchen damage was most likely caused by the leaking fridge-freezer rather than the bathroom leak, based primarily on the surveyor's finding of standing water pooling directly beneath the fridge-freezer and the concentrated pattern of damage in that location. The ombudsman rejected Mr T's theory that water travelled beneath the floor structure and across a membrane through a solid masonry wall, finding the physical evidence and structural layout did not support this. The ombudsman upheld Lloyds' categorisation of the fridge-freezer leak as a gradually occurring maintenance issue excluded by the policy. Regarding scope and settlement, the ombudsman found Lloyds' second surveyor's scope was reasonable and that Mr T's estimate included unnecessary items beyond reinstatement of insured damage. The ombudsman determined that £1,200 total compensation was fair given the distress, inconvenience, and disruption to Mrs T's daily life, and upheld inclusion of hallway carpets under contents cover.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Lloyds Bank General Insurance Limited, all decisions | 1,332 | 25% |
Source
Read the original decision on the Financial Ombudsman Service website