Upheld: claim handling, unfair claim decline, poor communication on policy renewal complaint against Red Sands Insurance Company (Europe) Limited

Decision detail

Summary

Mr and Mrs M complained about Red Sands' handling of their buildings and contents insurance claim following a burglary in August 2024, the decline of certain items (jewellery, watches, and sovereign coins), delays in processing, and the firm's failure to renew their policy. Red Sands initially awarded £100 compensation for delays and declined to cover the three item categories. The ombudsman upheld the complaint, finding that sovereign coins were incorrectly declined as they are unlikely to be taken outside the house, while jewellery and watches were correctly declined as they were specifically mentioned in the policy. The ombudsman also found the renewal decline was handled poorly with insufficient communication. Red Sands was directed to reconsider the sovereign coins claim and pay £400 total compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman found that while jewellery and watches were clearly specified in the policy as items that can be taken outside the house and therefore correctly declined, the sovereign coins should have been covered under standard contents sections as they are unlikely to be taken outside the house despite being legal tender. The policy terms were clear but unusual, and the renewal decline, while justified by underwriting criteria, was handled poorly with insufficient communication. The delays in processing the claim and the combination of these issues caused distress and inconvenience warranting increased compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website