Upheld: poor claims handling, service failures, inadequate compensation complaint against Zurich Insurance PLC

Decision detail

Summary

Mr and Mrs R complained about Zurich Insurance PLC's handling of their buildings insurance claim following water damage to their flat. An earlier Ombudsman had awarded £2,000 compensation for the period up to October 2024. This decision concerns events after October 2024, when further repair issues arose including improper reinstatement of the kitchen extraction fan causing condensation damage and electrical problems with the hob and oven lasting from November 2024 to January 2025. The resolution process was protracted, with disputes between Zurich's surveyor and contractor, requiring Mr and Mrs R to make repeated efforts to progress matters. Zurich ultimately offered cash settlements totalling £8,345.54 and £200 compensation. The Ombudsman upheld the complaint, finding £200 insufficient for the significant distress and inconvenience caused over several months, and awarded £500 total compensation.

The Ombudsman's reasoning

The Ombudsman found that while the underlying workmanship issues were ultimately addressed through cash settlements, the key question was whether £200 compensation fairly reflected the distress and inconvenience caused during the period from October 2024 to May 2025. The evidence showed ongoing problems with repairs lasting several months, including the extraction fan failure causing daily inconvenience and damage, electrical issues affecting essential appliances over a two-month period, and a protracted resolution process involving rearranged appointments, repeated contact with Zurich, and a dispute between the surveyor and contractor that left customers caught in the middle. The Ombudsman considered that £200 was appropriate only for short-term issues or relatively limited inconvenience, but this case involved significant inconvenience and distress over many weeks or months, requiring repeated efforts from Mr and Mrs R and causing uncertainty about their home's condition. The Ombudsman also took into account Mr R's evidence that the situation caused stress, affected his mental health, and exacerbated an existing medical condition, though without medical evidence of direct causation. The Ombudsman concluded that £500 was fair compensation for this period, falling within a higher band reflecting the prolonged and significant impact.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website