Not upheld: unfair claims settlement - application of sum insured limit complaint against Admiral Insurance (Gibraltar) Limited

Decision detail

Summary

Mr J complained that Admiral unfairly settled his contents claim for a stolen watch by limiting payment to the schedule amount of £21,900, despite Admiral's own valuation of £26,400. Mr J argued the policy provided 'new-for-old' cover and that Admiral should have prompted him to update the valuation at renewal. The ombudsman rejected the complaint, finding the policy terms clearly stated the maximum payable was the schedule amount and that the policyholder bore responsibility for ensuring accurate valuations. Although Admiral acknowledged it could have communicated better about its own valuation and awarded £250 compensation plus interest, the ombudsman found this remedy appropriate and did not direct any additional payment.

The Ombudsman's reasoning

The ombudsman found that the policy terms were clear and unambiguous: the maximum Admiral would pay for a specified item was the sum shown in the schedule (£21,900). The schedule explicitly stated that Admiral did not take responsibility for valuations and did not automatically increase sums in line with inflation, placing responsibility on the policyholder to ensure accurate values. Although Admiral's own valuation of £26,400 was higher, this did not create an obligation to pay more than the insured sum. The ombudsman rejected arguments about 'new-for-old' cover, noting the policy clearly had limits. Regarding the bezel, Admiral's decision to treat it as a separate item and pay £2,000 (the non-specified item limit) was fair. The ombudsman agreed Admiral could have handled the claim better but found the compensation of £250 and 8% interest on the delayed settlement to be appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website