Upheld: claims handling failure and unfair application of policy exclusion complaint against Intact Insurance UK Limited

Decision detail

Summary

Miss S complained about Intact's handling of claims under her legal expenses insurance policy following extensive building work on her property. She had notified Intact of a potential patio claim prior to the August 2023 policy expiry, which Intact agreed to consider. Miss S believed this meant all her subsequent claims against her main contractor would be covered on the same basis, an understanding she said was reinforced by her broker and by Intact's correspondence. However, when Miss S formally claimed in February 2024 (outside the policy period) for multiple defects, Intact declined the claims relying on a policy exclusion for claims reported outside the period of insurance. The ombudsman upheld the complaint not because the claim decline was unfair, but because Intact failed to clearly communicate its position on late notification despite multiple opportunities to do so, causing Miss S unnecessary distress and inconvenience. Intact was ordered to pay £500 compensation.

The Ombudsman's reasoning

The ombudsman concluded that while Intact was entitled to rely on the policy exclusion for claims reported outside the period of insurance (as the 'Insured Event' - the reporting of the claim - occurred in February 2024, outside the August 2023 policy expiry), Intact failed in its duty to handle the claim fairly by not clearly communicating this position to Miss S. The January 2024 email agreeing to consider 'your claim' related only to the patio claim, not future claims, and Intact should have corrected Miss S's subsequent misunderstanding. Although Intact's failure to clarify did not change the ultimate coverage position, it caused Miss S unnecessary distress and inconvenience by leaving her under the impression for an extended period that her claims would be covered, leading her to expend time and effort compiling information that could have been avoided.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website