Not upheld: claim decline - failure to comply with policy conditions complaint against UK Insurance Limited

Decision detail

Summary

Mr M held a landlord insurance policy with UKI that included rent guarantee cover. When his tenants stopped paying rent after two years, Mr M claimed under the rent guarantee. UKI declined the claim because Mr M had obtained only verbal references for his tenants, contrary to a clear policy condition requiring written references from a licensed referencing service. Mr M complained that he was unaware of this condition as he claimed not to have received the policy documents. The ombudsman found the policy terms were clear and unambiguous, the condition was reasonable and not onerous, and Mr M's failure to comply meant UKI was entitled to decline the claim. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the policy terms were clear and unambiguous in requiring written references from a licensed referencing service as a condition of rent guarantee cover. Mr M did not comply with this condition by obtaining only verbal references. The ombudsman considered the condition reasonable, not onerous, and a legitimate risk mitigation measure that UKI was entitled to impose. The failure to comply with the condition meant it was fair for UKI to decline the claim when the insured risk (non-payment of rent) occurred. Regarding Mr M's claim that he did not receive policy documents, the ombudsman found he should have requested copies if documents went astray.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website