Not upheld: Home insurance claim disputes complaint against Liverpool Victoria Insurance Company Limited

Decision detail

Summary

Mr and Mrs B complained that LV only partially covered their claim for defective drains under their home buildings insurance policy. After Mr B reported a foul smell from the downstairs toilet, LV's contractor carried out repairs but excluded work beneath the building, concluding the underlying cause was poor installation of the drainage system. Mr B then appointed a specialist who completed the remaining repairs at his own cost. The ombudsman found that LV fairly declined to cover the full claim because expert evidence demonstrated the drainage system had been installed incorrectly without proper support, which falls within the policy exclusion for damage from poor workmanship/installation. The ombudsman rejected the policyholder's arguments and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied the principle that the policyholder must show an insured loss, and the insurer can rely on policy exclusions. The expert evidence from LV's contractor's CCTV investigation persuasively demonstrated that the underlying cause of the drainage problems was poor installation without required support, not accidental damage. This falls within the policy exclusion for damage resulting from poor workmanship/installation. The ombudsman rejected Mr B's argument that issues would have manifested earlier if installation was defective, finding the expert evidence more persuasive than Mr B's lay reasoning. The ombudsman concluded LV was not responsible for investigating or repairing issues once it identified the underlying cause was not covered by the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website