It can be distressing for customers to experience damage to their property or items they own.
If they come to us with a complaint about an accidental damage claim, we’ll listen to both sides of the story and deal with it fairly.
Types of complaint we see
When insurance companies decline claims, the complaints we see are often because:
- the damage wasn’t accidental
- the policy didn’t cover what had happened
- the damage was accidental but there was a policy exclusion, such as wear and tear
- the policyholder wasn’t covered for accidental damage
- the cover needed for the damage was an optional extra that the policyholder didn’t have
- the insurer says there was no accident
- the insurer says there was no damage
Another example is when a policyholder has taken out additional cover and paid an extra premium for it, but had their claim declined. In this case, they might question the value of paying more money if they don’t feel they’ve received further cover.
Or the policyholder may have had the opposite problem. They didn’t take out accidental damage cover but now think they should have done. For example, as an insurer, you might agree the damage was accidental, but because the policyholder didn’t take it out, you declined their claim.
In these situations the policyholder may feel they weren’t given enough information about the benefits of the cover when you sold it to them. If they’d received enough information, they might have bought it and been covered.
We sometimes see complaints where neither you nor the policyholder has mentioned accidental damage cover. For example, you may have rejected a claim on a buildings insurance policy for damage caused by a storm to the policyholder’s house and items inside. But you didn’t take into account whether they’d bought additional accidental damage cover.
Handling a complaint like this
When you receive a complaint involving accidental damage, you should reply to your customer within eight weeks.
If you don’t reply within the time limits, or the customer disagrees with your response, they can bring their complaint to us. We’ll check it’s something we can deal with, and if it is, we’ll investigate.
We’ll expect you to show us that you’ve investigated the complaint thoroughly and that you've reflected carefully on the circumstances.
Find out more about how to resolve a complaint.
What we look at
If you declined a claim for accidental damage, we’ll usually start by asking what cover the policyholder had and which parts might be relevant to the damage they’re claiming for.
We’ll also want to know whether they had standard cover or accidental damage cover.
We’ll check that you used the terms and conditions of the policy that were in force when the damage occurred.
Broadly speaking, we’ll need to look at:
- what happened
- what evidence there is
- the particular definition of ‘accidental’ that applied
If the policyholder took out accidental damage cover, we’ll examine whether it was for buildings only, contents only, or both. If they took out accidental damage cover, or any extra cover, the next step is to look at exactly what you provided.
If you haven’t allowed for the additional cover that the policyholder has taken out, we may ask you to reconsider the claim.
We’ll need to establish whether the damage was caused by an accident, according to the policy definition. If we find it wasn’t, we’ll check if the damage is included elsewhere in the policy. Then we’ll ask you to deal with the claim, unless there’s a policy exclusion.
It doesn’t matter whether the policyholder originally made the claim specifically for accidental damage and it doesn’t matter if they didn’t mention it.
If a policy doesn’t define what it means by accidental damage, we usually apply a definition. We’ll say it’s something that is:
- not only physical damage to an item, but also something that resulted in a loss of function so something can't perform the task it was designed to do
For example, we might say that a blocked drain is damaged even if there's no physical breakage or visible trauma. This is because the drain couldn’t do what it was designed to do.
Where a policy does define accidental damage, we’ll look at how you communicated the definition of ‘accidental damage’ to the policyholder. If you rejected their claim, we’ll probably disagree if:
- the policy defined accidental damage as something significantly different from its usual meaning
- the policyholder’s attention wasn’t drawn to the unusual definition
- the policyholder would have acted differently had they been aware of any limitations in the cover or unusual features
We’re likely to be satisfied that a definition of accidental damage was brought to the policyholder’s attention if it was:
- written in plain language
- given some prominence when the policy was sold or whenever the definition was introduced
Common policy terms to describe accidental damage
Sometimes, the policy definition includes the word ‘sudden’ but the policyholder can’t pinpoint a time that the damage happened. That alone doesn’t mean the damage wasn’t sudden.
Often the damage, rather than the cause of the damage, has to be sudden. So a long-running problem might lead to something else suddenly being damaged. We’ll take into account the nature and extent of the damage on each case.
Some policies use the word ‘breakage’ instead of 'damage'. Often this term is used in the wording for cover of underground pipes or glass and ceramic items. The following can be referred to as breakage:
- smashed glass
- shattered ceramics
- cracked pipes
In most cases, it’s unlikely that the difference between damage and breakage will decide the outcome of a complaint.
Sometimes damage results in a loss of function. In other words, something no longer performs the task it was supposed to.
For example, a drainpipe could be physically damaged if it’s cracked or deformed. But it could also be functionally damaged if it’s blocked and water is unable to flow through it – even if there’s no physical damage to the pipe.
In some cases of accidental damage, some kind of external action must have caused the damage. For example, a hole in a pipe behind a wall would have to be caused by an external force like a nail being accidentally hammered into it.
Generally, accidental damage cover doesn’t include damage caused by:
- wear and tear
- the gradual deterioration of something with age
- wilful or deliberate acts
- defective workmanship
We’ll consider whether the exclusion was significant or unusual. If we find that it was, we’ll look at how you communicated this to the policyholder. It’s unlikely to be enough to have simply mentioned it in a policy document or renewal literature.
We’re likely to uphold a complaint if:
- the policyholder’s attention was not adequately drawn to the exclusion
- the policyholder would probably have acted differently on being told about the exclusion and would have been in a better position as a result
We’re likely to be satisfied that an exclusion was brought to the attention of the policyholder, if it was:
- written in plain language
- given some prominence when the policy was sold or whenever the exclusion was introduced
‘All risks’ policies
If you offered an ‘all risks’ policy, covering any damage not specified in the policy and refused to pay a claim because of an exclusion, we’ll consider:
- how clearly worded the exclusion was
- how significant it was
- whether it was adequately brought to the attention of the policyholder when they took the policy out
We’ll need to look at the evidence to assess whether the problem was caused accidentally.
- evidence of expert advice
- photos of the damage
- a report, including photos, from a surveyor or loss adjuster
- a report from a specialist company, for example, those that specialise in claims for high-value contents
We’ll then weigh up the evidence to make a fair decision.
Putting things right
If we decide you’ve treated the customer unfairly, or have made a mistake, we’ll ask you to put things right. Our general approach is that the customer should be put back in the position they would have been in if the problem hadn’t happened.
For example, if we’re satisfied that a claim shouldn’t have been rejected, we’ll usually tell you to pay out. We may also say that you should pay an additional amount. This is to account for the policyholder not receiving the money sooner.
We may also tell you to pay compensation to the policyholder for any distress or inconvenience they’ve experienced as a result of the problem.
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Business Support Hub
If you want to talk informally about a complaint you've received, you can speak to our Business Support Hub. They can give general information on how we might look at a particular complaint. We also offer guidance on our rules and how we work.