Upheld: Service failures generally complaint against ARAG Legal Expenses Insurance Company Limited

Decision detail

Summary

Miss T claimed on her home emergency insurance policy after discovering a water leak from her loft. ARAG refused to provide a contractor due to her remote location and instead reimbursed her for sourcing her own contractor. Miss T complained that ARAG's failure to assist caused additional damage requiring more extensive repairs. The Ombudsman found ARAG treated Miss T unfairly by refusing to appoint a contractor when the policy terms required it to do so, with location only affecting service standards, not permitting refusal. The complaint was upheld and ARAG was directed to pay £250 toward likely repair costs and £300 compensation for distress and inconvenience.

The Ombudsman's reasoning

The policy terms clearly obligated ARAG to instruct a member of its emergency contractor network when a covered incident occurred. While the policy acknowledged that location might affect service standards, it did not permit ARAG to refuse service entirely. By failing to source a contractor and instead asking Miss T to find her own, ARAG provided no service at all, which was unfair treatment. Although some repairs would likely have been necessary even with prompt contractor attendance, ARAG's delay caused additional damage. Without detailed evidence of the full extent of repairs needed, the Ombudsman estimated £500 in likely repair costs and determined a fair contribution was £250 (half the estimated cost), plus £300 compensation for distress and inconvenience caused by ARAG's failure to assist.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website