Partially upheld: poor claims handling, inadequate communication, unfair policy administration complaint against HCC International Insurance Company Plc

Decision detail

Summary

Mr and Mrs M complained about how HCC handled their enquiry regarding a sinkhole in their garden and the subsequent renewal of their home insurance policy. They contended that a simple enquiry was turned into a claim without their knowledge, that HCC's communication was unclear, and that it was unfair for HCC to record it as a claim, restrict their cover, and increase premiums. While the ombudsman found HCC was entitled to treat the matter as a claim and apply the mid-term endorsement and renewal terms, it upheld the complaint regarding HCC's poor communication at multiple stages, including failure to clearly explain the claim status, confusing information about investigations, failure to communicate directly about renewal, and excessive delays in responding to the complaint. The ombudsman awarded £450 compensation for the distress and inconvenience caused.

The Ombudsman's reasoning

While HCC was entitled to treat the matter as a claim given the serious nature of a sinkhole and the specialist investigation required, and was entitled to apply the mid-term endorsement and set renewal terms, the key failing was in communication. HCC did not clearly explain at the outset that the matter was being treated as a claim or what the consequences could be. The March 2024 letter was confusing about why further investigations were needed and what would happen if they weren't completed. HCC failed to communicate directly with Mr and Mrs M about the renewal position, and took over three months to respond to the complaint with multiple missed deadlines. These communication failures caused avoidable confusion, frustration, distress and inconvenience, particularly given Mr and Mrs M's health issues at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website