Partially upheld: unfair excess charges and claim handling costs recovery complaint against Advantage Insurance Company Limited
Financial Ombudsman decision DRN-6365484 of 2026-05-20T00:00:00+00:00. unfair excess charges and claim handling costs recovery complaint against Advantage Insurance Company Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6365484 |
|---|---|
| Decision date | 2026-05-20T00:00:00+00:00 |
| Firm | Advantage Insurance Company Limited |
| Product | home insurance |
| Claim type | unfair excess charges and claim handling costs recovery |
| Outcome | Partially upheld |
| Remedy | Refund the excess charged under Trace and Access (buildings) and Escape of Water sections; pay interest at 8% simple interest per annum from date of excess payment to date of reimbursement; payment within 28 days with additional 8% interest if late; provide tax deduction certificate if required by HMRC |
Summary
Mr A and Mrs N claimed for water damage under their home insurance policy with Advantage. Advantage instructed a leak detection company which found the damage was caused by failed shower screen seal and cracked grout, not a covered peril, and declined the claim. A second inspection confirmed these findings. Mr A obtained a contractor's letter claiming waste pipe damage but provided no supporting evidence. Advantage charged a £650 excess for Trace and Access and Escape of Water. The ombudsman found the claim rejection fair based on specialist evidence but upheld the complaint regarding the excess charge, ruling that excess should only apply when claims are paid and that insurers should not recover claim handling costs from customers.
The Ombudsman's reasoning
The ombudsman found Advantage's decision to reject the claim was fair because the leak detection company's evidence using specialist equipment (thermal imaging, dye testing, camera inspection) clearly showed the damage was caused by failed shower screen seal and cracked grout, which constitutes wear and tear and is excluded from cover. The contractor's letter provided by Mr A lacked supporting evidence and was less persuasive than the specialist diagnostic evidence. However, the ombudsman found it unreasonable to charge the excess because the policy requires an excess only when a claim is paid. Since Advantage determined no covered peril occurred, no excess should be charged. Additionally, a second inspection was unnecessary as no new evidence contradicted the first findings, making the claim handling costs unreasonable to recover from the customer.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Advantage Insurance Company Limited, all decisions | 1,756 | 40% |
Source
Read the original decision on the Financial Ombudsman Service website