Upheld: Home insurance claim disputes complaint against Zurich Insurance Company Ltd

Decision detail

Summary

Miss L, a leaseholder, claimed under a property owners insurance policy for escape of water damage caused by a tap left running in the flat above in September 2024, with a second claim arising from a leak in March 2025. Between October 2024 and January 2025, Miss L and Zurich disputed repair costs, with Zurich offering £1,000 compensation. After multiple inspections and surveys between February and April 2025, Zurich concluded the property had returned to acceptable moisture levels and declined to provide further drying, strip-out works, or alternative accommodation. Miss L carried out drying and decoration works herself and sought full reimbursement plus higher compensation. The ombudsman upheld the complaint in part, finding Zurich should reimburse reasonable costs for repair and drying works Miss L incurred, but rejecting claims for further works, alternative accommodation, and professional fees, while maintaining the £500 compensation was fair given Zurich's poor service in managing expectations.

The Ombudsman's reasoning

The ombudsman found that the two escape of water claims were separate occurrences and fairly treated as such under the policy terms. The ombudsman concluded that Zurich's evidence regarding the property's moisture levels was more persuasive than Miss L's surveys, particularly noting that Miss L's April 2025 survey contradicted her December 2024 survey and suggested condensation rather than EOW as the primary cause of moisture. The ombudsman found that by April 2025, the property had returned to acceptable moisture levels and therefore no further drying or strip-out works were required. The ombudsman determined that Miss L's refusal to allow strip-out works until settlement was agreed, combined with her indication that a full property strip-out would be required (which the ombudsman found unsupported by evidence), meant Zurich was not responsible for delays in works. However, the ombudsman found Zurich provided poor service by managing Miss L's expectations poorly, leading her to believe alternative accommodation would be provided and offering settlement amounts well in excess of what it later claimed was appropriate. The ombudsman found Zurich should reimburse reasonable costs Miss L incurred for repair and drying works, but not professional fees for surveys, as these did not materially impact the claim. The ombudsman rejected claims for alternative accommodation (as the property was habitable), contents damage (not covered under the policy), and consequential losses.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website