Upheld: Home insurance claim disputes complaint against Liverpool Victoria Insurance Company Limited
Financial Ombudsman decision DRN-6459887 of 2026-06-29T00:00:00+00:00. Home insurance claim disputes complaint against Liverpool Victoria Insurance Company Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6459887 |
|---|---|
| Decision date | 2026-06-29T00:00:00+00:00 |
| Firm | Liverpool Victoria Insurance Company Limited |
| Product | Home insurance |
| Claim type | Home insurance claim disputes |
| Outcome | Upheld |
| Remedy | Increase cash settlement from £5,361.49 to £7,778.55 excluding VAT; pay interest on the difference at 8% simple interest per annum from date of original settlement to date of payment; pay £350 compensation for distress and inconvenience; compensation to be paid within 28 days with interest at 8% simple rate if paid later |
Summary
Miss C claimed for escape of water damage to her home in July 2025 and chose a cash settlement rather than using LV's approved repairer. LV initially offered £3,756.48 but refused to provide a cost breakdown citing commercial sensitivity. After Miss C provided builder estimates significantly higher than the settlement and escalated her complaint, LV increased the offer to £5,361.49. However, this remained substantially below the original Scope of Works valuation of £7,778.55 from LV's own inspection. The ombudsman found LV acted unreasonably by failing to clearly explain the discrepancy and applying an undisclosed 'household rate' not permitted by the policy terms. The complaint was upheld and LV was required to increase the settlement to £7,778.55 with interest and pay £350 compensation.
The Ombudsman's reasoning
The ombudsman found that LV failed to properly explain why its cash settlement offers were significantly lower than the original Scope of Works amount of £7,778.55. While LV's policy permits cash settlement at the rate it would pay approved suppliers (insurer rate), the policy does not permit payment at a lower 'household rate' or make this conditional on a customer providing an estimate. LV was given multiple opportunities to clarify the discrepancy but provided conflicting and unexplained cost breakdowns. In the absence of reasonable evidence supporting the lower cash settlement, the ombudsman determined that LV acted unreasonably and should pay the original SOW amount. The ombudsman rejected claims of avoidable delays but found LV caused unnecessary distress and inconvenience through its lack of transparency.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Liverpool Victoria Insurance Company Limited, all decisions | 1,952 | 27% |
| Home insurance claim disputes, all decisions | 25,670 | 38% |
| Home insurance, all decisions | 20,959 | 38% |
Source
Read the original decision on the Financial Ombudsman Service website