Unfair to reduce claim payment after insurer hadn’t asked for full contents value

Home insurance

Veronica and Mike's insurer refused to pay out, saying that they'd undervalued their contents. Unhappy, they referred their complaint to us.

What happened?

Veronica and Mike own contents at their property which would cost £50,000 to replace if they were lost or stolen. But they wrote on their application that they only sought insurance cover of £30,000. They thought it was unlikely they’d suffer a loss of more than £30,000 in one insured event.

When they made a claim on their policy to replace some of the contents, they were surprised that their insurer refused to pay out. The insurer said it’s because they undervalued their contents and wouldn’t have offered a policy if they had known.

Unhappy with the insurer’s response, Veronica and Mike referred their complaint to us.

What we said

We investigated, and found that the insurer hadn’t asked them to estimate the replacement cost of their entire contents – only to provide a ‘sum insured’.

We didn’t think it was fair to reduce the claim payment on the basis that the customer didn’t estimate the full amount. We asked the insurer to pay the claim for £10,000 in full.