Not upheld: claims handling - partial refusal of fuel costs complaint against Liverpool Victoria Insurance Company Limited

Decision detail

Summary

Mr and Mrs E claimed LV should refund all oil fuel costs incurred while their water-damaged home was being repaired and they stayed in alternative accommodation. LV offered to refund only additional fuel costs above normal usage, requesting historical usage statements for calculation. The ombudsman upheld LV's position, finding that as an indemnity policy, it should only cover additional costs incurred due to the insured event, not full costs, which would constitute betterment. Since alternative accommodation utilities were already covered by LV, paying full fuel costs would place the complainants in a better position than the policy intended.

The Ombudsman's reasoning

The policy is one of indemnity, designed to restore the policyholder to their pre-loss position, not to better it. Since Mr and Mrs E did not pay for utilities at the alternative accommodation, they did not incur normal everyday living costs. Paying full fuel oil costs would constitute betterment and exceed policy cover. LV's request for historical usage statements to calculate additional costs was reasonable and proportionate. The alleged contractor statement does not change the policy's indemnity nature or create unfair treatment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website