Upheld: unfair claim settlement and policy interpretation complaint against Red Sands Insurance Company (Europe) Limited
Financial Ombudsman decision DRN-6407475 of 2026-06-12T00:00:00+00:00. unfair claim settlement and policy interpretation complaint against Red Sands Insurance Company (Europe) Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6407475 |
|---|---|
| Decision date | 2026-06-12T00:00:00+00:00 |
| Firm | Red Sands Insurance Company (Europe) Limited |
| Product | Home insurance |
| Claim type | unfair claim settlement and policy interpretation |
| Outcome | Upheld |
| Remedy | Red Sands must: (1) settle the claim without the 50% reduction; (2) settle the bag and necklace claims up to the policy limit of £1,150 per item; (3) reconsider the watch claim upon receipt of proof of ownership; (4) add 8% simple per annum interest from the original settlement date to any additional payments; (5) pay £350 total compensation (£150 already offered for watch delay plus £200 for distress and inconvenience from unfair settlement). |
Summary
Mr F claimed on his home insurance policy after a burglary while on holiday. Red Sands accepted the claim but applied a 50% reduction for failure to set the alarm, refused to cover a watch without import tax receipts, and refused to cover a bag and necklace worth over £1,500 because they were unspecified. The ombudsman upheld the complaint, finding door-cam footage and alarm company evidence supported that the alarm was set but subsequently failed, the policy terms clearly cover unspecified items worth over £1,500 up to £1,150 each, and Red Sands should reconsider the watch claim. Red Sands was ordered to settle without reduction, cover the bag and necklace to policy limits, add 8% interest, and pay £350 compensation.
The Ombudsman's reasoning
The ombudsman found that while the alarm did not register on the alarm company's systems, the door-cam footage showing the alarm being activated with an audible bleep, combined with the alarm company's admission of potential connection failures, meant it was most likely the alarm was set but subsequently failed. The strict interpretation that 'set' means fully functional and operational at all times was deemed unreasonable given the ambiguity and circumstances. Regarding the bag and necklace, the policy terms clearly indicate that unspecified items worth over £1,500 are covered up to £1,150 per item, with the policyholder liable for the first £350 and any amount over £1,500. The policy does not exclude such items entirely.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Red Sands Insurance Company (Europe) Limited, all decisions | 994 | 49% |
| Home insurance, all decisions | 20,668 | 38% |
Source
Read the original decision on the Financial Ombudsman Service website