Upheld: unfair claim decline due to ambiguous policy wording complaint against AXA Insurance UK Plc

Decision detail

Summary

Ms E and Mr H claimed on their home contents insurance policy after two high-value bikes (£12,000 and £8,000) were stolen from an outbuilding at their property. AXA declined the claim, arguing that specified items were only covered for theft from inside the main building, not from outbuildings. The ombudsman found the policy documentation was ambiguous and contradictory - the schedule's main table stated coverage for specified items 'Inside and Outside the home', while later sections stated bikes were covered 'within the Home only'. Applying the principle that ambiguities should favour the customer, the ombudsman upheld the complaint and ordered AXA to settle the claim, pay interest, and provide £100 compensation.

The Ombudsman's reasoning

The ombudsman applied the principle that where policy documentation is ambiguous, the benefit of the doubt should be given to the customer, as insurers are the experts who draft the terms. The policy contained three location categories (inside home, outside home, away from home) but the specified items section conflated inside and outside the home. The schedule's main table clearly stated Ms E and Mr H were covered for specified items 'Inside and Outside the home' to £20,000, which directly contradicted the later statement that bikes were covered 'within the Home only'. A reasonable customer reading the main table in the schedule and section 5(A) of the policy booklet could justifiably assume the bikes were covered in the outbuilding.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website