Upheld: irresponsible claim handling and avoidable delays complaint against UK Insurance Limited trading as Privilege

Decision detail

Summary

Mr B and Mrs M complained that UK Insurance Limited (trading as Privilege) caused avoidable delays in handling a subsidence claim made in 2019, which remained incomplete as of May 2025. The ombudsman found material avoidable delays of at least 18 months, particularly a 22-month gap between determining underpinning was necessary (March 2021) and works commencing (January 2023). The delays caused Mr B to lose rental income he would have earned had the property been available for letting at market rates, and caused distress through poor communication and repeated follow-ups required. The ombudsman upheld the complaint and awarded £2,400 for loss of rent plus 8% interest, and £650 additional compensation for distress and inconvenience, but rejected a claim for increased insurance costs due to insufficient evidence of quantifiable loss.

The Ombudsman's reasoning

The ombudsman found that while some delay was attributable to the nature of the claim and matters outside UKI's control, the evidence supported findings of material avoidable delays of at least 18 months. The long period between determining underpinning was necessary (March 2021) and works commencing (January 2023) exemplified unreasonable inactivity. UKI's claim delays caused quantifiable loss of rental income and distress. However, regarding increased insurance costs, the ombudsman found insufficient evidence that claim status (open vs closed) materially affected UKI's pricing methodology, as the subsidence claim itself was always a limiting factor regardless of status.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website