Unfair to decline claim as insurer didn’t give enough guidance about rebuild cost

Home insurance

Sophie's insurer declined her claim, saying that it would cost more to rebuild than what she told them originally.

What happened

Sophie insured her home for £400,000. She made a claim after it was damaged by fire and her insurer told her it would actually cost £600,000 to rebuild it, based on a loss adjuster’s valuation. And as it only insured homes worth up to £500,000, it declined her claim.

Sophie felt this was unfair and raised a complaint. She didn’t think there was enough information available to help her work out the rebuild costs when she first took out the policy.

The insurer said in its final response that it won’t change the decision to decline her claim. Unhappy with the outcome, Sophie contacted us to investigate her complaint.

What we said

We found at the latest renewal the insurer had asked Sophie for the ‘rebuild cost’. But it hadn’t provided any further information or guidance, other than a link to an online rebuild calculator. She’d used it accurately and was given an estimate of £350,000-£450,000.

We thought her answer was reasonable in the circumstances – she’d followed the only guidance she was given and she wouldn’t have had access to a loss adjuster’s valuation at that time. So we told the insurer to accept the claim.