Upheld: Home insurance claim disputes complaint against Arch Insurance (UK) Limited (trading as Arch Insurance International)
Financial Ombudsman decision DRN-6391338 of 2026-06-25T00:00:00+00:00. Home insurance claim disputes complaint against Arch Insurance (UK) Limited (trading as Arch Insurance International). Outcome: Upheld.
Decision detail
| Reference | DRN-6391338 |
|---|---|
| Decision date | 2026-06-25T00:00:00+00:00 |
| Firm | Arch Insurance (UK) Limited (trading as Arch Insurance International) |
| Product | Other regulated product |
| Claim type | Home insurance claim disputes |
| Outcome | Upheld |
| Remedy | Arch Insurance (UK) Limited must: (1) make an additional payment to settle the claim without a reduction for underinsurance, subject to remaining policy terms; (2) pay £300 compensation for inconvenience; (3) pay interest on the additional payment at 8% simple per annum from 1 October 2023 to the date of payment; (4) include the outstanding planning fee of approximately £23,000 in the claim settlement without underinsurance reduction. The ombudsman recommends (but does not require) that Arch pay any balance exceeding the £445,000 award limit. |
Summary
Mr O, on behalf of C (a limited company), complained about Arch Insurance's decision to proportionately settle a commercial buildings insurance claim following a fire, claiming C was underinsured. Arch had set the declared value at approximately £5,300,000 in 2021 but later claimed it should have been approximately £7,000,000, reducing the claim settlement to 76.9%. The ombudsman found that Mr O's estimate was reasonable under the Insurance Act 2015, as he had relied on a credible 2018 professional survey, reasonably excluded removable tenant improvements, and used reliable BCIS rates to index link the estimate in line with Arch's own suggestion. Arch failed to evidence that any inaccuracy from using BCIS rates for a third year was significant. The ombudsman upheld the complaint and ordered Arch to settle the claim without underinsurance reduction, pay £300 compensation, and pay interest at 8% simple per annum from 1 October 2023.
The Ombudsman's reasoning
The ombudsman applied the Insurance Act 2015 as the relevant legal framework for assessing whether C made a fair presentation of risk. The key test was whether Mr O's estimate of £5,331,240 was reasonable based on what he knew or ought reasonably to have known in 2021. The ombudsman found that Mr O acted reasonably by: (1) relying on a credible 2018 professional survey; (2) reasonably excluding £300,000 for removable tenant improvements; (3) using BCIS rates to index link for two years as suggested by Arch; and (4) applying a 6% increase in 2021 in line with BCIS rates and Arch's own suggestion. While relying on BCIS rates for a third year may have introduced some inaccuracy, Arch failed to evidence that any such inaccuracy was significant or would have resulted in a materially different estimate. The ombudsman rejected Arch's reliance on a detailed tender exercise as the benchmark, since Mr O was not required to conduct such an exercise. Therefore, Mr O made a fair presentation and Arch had no remedy under the Act.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Arch Insurance (UK) Limited (trading as Arch Insurance International), all decisions | 1 | 100% |
| Home insurance claim disputes, all decisions | 25,670 | 38% |
| Other regulated product, all decisions | 47,449 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website