Upheld: claim coverage dispute and loss of match compensation complaint against UK Insurance Limited

Decision detail

Summary

Ms A complained that UKI refused to cover the cost of re-tiling her kitchen area following damage to her utility area flooring during insured drain repair work. UKI offered either to replace only the utility area with a door bar separator, or to replace both areas with Ms A paying 50% of kitchen costs. Ms A objected, concerned about unprofessional finishes and trip hazards. The ombudsman upheld the complaint, directing UKI to offer Ms A two options: replace both areas with her 50% contribution, or replace only the utility area with UKI paying compensation equivalent to 50% of kitchen costs for loss of match, with provision for kitchen replacement if damage occurs during utility work. The ombudsman found UKI's original offer did not adequately address the loss of match issue or provide a fair choice for those unable to fund the 50% contribution.

The Ombudsman's reasoning

The ombudsman found that while the policy limits liability to the damaged utility area, fairness requires offering Ms A a choice between two options. Option A allows her to replace both areas if she can afford 50% of kitchen costs. Option B provides compensation equivalent to 50% of kitchen costs for loss of match if she chooses to replace only the utility area, with a provision that if damage to kitchen flooring occurs during the utility work, UKI must replace the kitchen flooring too. This approach aligns with FOS guidance on loss of match compensation and recognizes that Ms A may not have funds to meet the 50% contribution under Option A. The ombudsman rejected UKI's argument that the two options are equivalent, noting that Option A presumes Ms A has sufficient funds, while Option B provides a fair alternative if she does not.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website