Not upheld: claim settlement valuation dispute complaint against Aviva Insurance Limited

Decision detail

Summary

Mr M claimed on his Aviva home insurance policy for lost diamond jewellery items specified on his policy. Aviva accepted the claim but offered settlement based on replacement costs through its specialist jewellers, which were substantially lower than the specified policy values. Mr M believed the specified values should be paid in full. The ombudsman found that the policy terms clearly allow Aviva to settle claims at replacement cost rather than specified values, and that Aviva provided sufficient evidence of comparable replacements at the offered amounts, making the settlement fair and reasonable.

The Ombudsman's reasoning

The ombudsman found the policy terms clearly allow Aviva to choose settlement method and limit cash payments to replacement costs through its suppliers. The specified values represent maximum amounts payable rather than guaranteed cash settlement figures. Aviva provided sufficient evidence demonstrating that like-for-like replacements were available at the offered amounts, making the voucher settlement fair and reasonable. The revised offer reflected current market and replacement costs.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website