Not upheld: Home insurance claim disputes complaint against ARAG Legal Expenses Insurance Company Limited

Decision detail

Summary

G, a limited company, complained that ARAG unfairly declined an LEI claim related to proceedings started by Company Y in September 2025. ARAG declined the claim on the basis that the date of occurrence (the first event in the dispute) occurred in October 2024, prior to G's policy inception on 10 March 2025. G argued the October 2024 date was inaccurate and based on false statements from Company Y, and that ARAG had failed to clearly explain the date of occurrence interpretation. The ombudsman found the claim was properly declined as evidence from multiple sources, including G's own defence statement, established the dispute was ongoing before the policy began, and therefore fell outside the period of cover regardless of the specific date chosen.

The Ombudsman's reasoning

The policy terms clearly state that the date of occurrence must fall within the period of insurance. The definition of 'date of occurrence' is the date of the first event arising from the same originating cause. Evidence from multiple sources, including G's own defence statement, demonstrates the dispute between G and Company Y was ongoing prior to 10 March 2025. Even if the October 2024 date were inaccurate, other dates such as February 2025 would still establish that the date of occurrence pre-dated the policy inception. ARAG's explanation of its reasoning was provided on multiple occasions. As G is a limited company, compensation for distress cannot be awarded.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website