Not upheld: suspected fraud and misrepresentation in insurance claim; unfair policy cancellation complaint against Lloyds Bank General Insurance Limited

Decision detail

Summary

Mr and Mrs W complained that Lloyds unfairly cancelled their home buildings insurance policy following claims for water damage. Mr W made a claim on 2 March 2025 for bathroom leak damage but repaired the utility room ceiling before the assessor's inspection, despite being advised inspection would likely be required. The assessor found little evidence supporting the claimed damage and raised concerns about a photo of the ceiling hole that was taken 4-5 years prior and uploaded in different format for both claims. Mr W failed to provide plumber contact details or documentation and withdrew the first claim after being told there was no cover. Lloyds cancelled the policy on 19 June 2025 citing suspected fraud and misrepresentation. The ombudsman did not uphold the complaint, finding Lloyds had valid grounds to question the claim's validity and acted fairly in relying on its policy terms to cancel the policy and decline both claims.

The Ombudsman's reasoning

The ombudsman found that Lloyds had valid grounds to question the claim's validity based on multiple concerning factors: the policyholder repaired damage before inspection despite being warned inspection was likely; submitted a photo of non-claim related damage from 4-5 years prior in different format; failed to provide plumber details or documentation; and the assessor found little physical evidence supporting the claimed damage. The policy terms clearly require policyholders to assist in claim validation and allow cancellation for fraud or exaggeration. The ombudsman concluded that withdrawing a claim does not negate fraud concerns, and Lloyds acted fairly in relying on its policy terms to decline both claims and cancel the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website