Upheld: poor claim handling, breach of promise, flawed settlement process, unfair settlement terms complaint against Lloyds Bank General Insurance Limited

Decision detail

Summary

Ms H and Mr H claimed on their home insurance policy with Lloyds for damage caused by a leaking tank in their loft. Lloyds appointed contractors to manage the claim but failed to deliver promised services, including a face-to-face meeting, and used a flawed process when requesting quotes from the customers' own contractor. After four months of inaction, Ms H and Mr H appointed their own contractor and paid £15,898 in repairs, while Lloyds offered only £9,091 in settlement plus £300 compensation. The ombudsman upheld the complaint, finding Lloyds failed to manage the claim reasonably and ordered settlement at market rates subject to policy terms, along with a required face-to-face meeting to clarify coverage.

The Ombudsman's reasoning

The ombudsman found that Lloyds failed to act reasonably by breaking its promise to arrange a face-to-face meeting, using a flawed process when requesting quotes, and allowing contractor workload issues to delay the claim. While some delays were caused by Ms H and Mr H's unwillingness to accept policy terms, Lloyds as claims experts should have managed the claim competently and fairly. The failed expectations and long delays justified settling at market rates rather than Lloyds' contractor rates, subject to policy terms preventing betterment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website