Partially upheld: claim decline - escape of water; complaint handling failure complaint against AXA Insurance UK Plc

Decision detail

Summary

Ms F claimed on her home buildings insurance for damage caused by a leak from her ground floor shower room. AXA declined the claim, stating the cause was either the mains water pipe or drains, both excluded under a policy endorsement for underground services. Ms F complained that AXA had not completed all necessary investigations and had relied on assumptions. The ombudsman found that pressure testing and tracer gas testing had adequately identified the leak as originating from the cold-water pipe, which Ms F is responsible for and which falls within the underground services exclusion. The endorsement had been clearly communicated to Ms F before policy inception. However, AXA improperly handled the complaint by incorrectly stating it was ineligible under FCA rules, and the ombudsman awarded £100 compensation for this complaint handling failure while upholding the claim decline.

The Ombudsman's reasoning

The ombudsman found that the policy endorsement clearly excluded claims arising from damage to underground services, which included the cold-water pipe under Ms F's property. Pressure testing and tracer gas testing established the leak originated from the cold-water pipe, which falls within the definition of underground services for which Ms F is responsible. The endorsement was clearly communicated to Ms F via phone call and renewal documents prior to policy inception, allowing her to make an informed decision. However, AXA failed to properly address Ms F's complaint about the claim decline, incorrectly stating it was ineligible under FCA rules, which caused distress and inconvenience.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website