Partially upheld: claim handling, coverage dispute, unfair claims decision complaint against Allied World Assurance Company (Europe) dac
Financial Ombudsman decision DRN-6298367 of 2026-04-21T00:00:00+00:00. claim handling, coverage dispute, unfair claims decision complaint against Allied World Assurance Company (Europe) dac. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6298367 |
|---|---|
| Decision date | 2026-04-21T00:00:00+00:00 |
| Firm | Allied World Assurance Company (Europe) dac |
| Product | commercial property insurance |
| Claim type | claim handling, coverage dispute, unfair claims decision |
| Outcome | Partially upheld |
| Remedy | AWA must: (1) cover the reasonable cost to replace flooring and carpets damaged by the failed sewer pipe; (2) add 8% simple interest per year from the date of payment to settlement; (3) pay £200 compensation for avoidable distress and inconvenience caused by the unfair refusal to cover the damaged carpets |
Summary
Mr and Mrs G claimed under their commercial property insurance policy for damage caused by a failed sewer pipe in February 2024. AWA declined to cover replacement of fitted carpets, treating them as contents, and stopped loss of rent cover in December 2024 when main works were completed. The ombudsman found that fitted carpets met the policy definition of 'landlords' fixtures and fittings' and should have been covered, awarding the cost of replacement plus 8% interest and £200 compensation. However, the ombudsman rejected claims for contractor-caused damage and extended loss of rent cover, as AWA did not appoint the contractor and the property was habitable after main repairs.
The Ombudsman's reasoning
The ombudsman found that fitted carpets, when fastened to the floor (whether glued or fitted with underlay and grippers), constitute 'fixtures and fittings' under the policy definition of 'buildings'. Although FOS generally considers carpets to be contents, the specific policy wording and individual circumstances required fair consideration. The ombudsman determined AWA acted unfairly in declining the claim. However, AWA was not responsible for contractor-appointed actions or damage caused by the contractor, and the property was habitable once the main flooring was reinstated in December 2024, so loss of rent cover extension was not warranted.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Allied World Assurance Company (Europe) dac, all decisions | 34 | 26% |
Source
Read the original decision on the Financial Ombudsman Service website