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ombudsman news

issue 73

October/November 2008

household insurance disputes involving incidents that happened outside the home

Most of the complaints we see about "household" insurance policies concern claims made in connection with the contents or structure of the policyholder's home. However, as these case studies show, "household" insurance disputes sometimes involve incidents that have taken place outside the home - in the garden, driveway, garage or outbuildings.

issue 73 index of case studies

  • 73/6 - household contents insurer refuses claim for theft of "minimoto" from policyholder's garage
  • 73/7 - insurer tells policyholder that "accidental damage" cover does not apply to his damaged lawnmower
  • 73/8 - insurer rejects claim for collapse of garden wall and resulting damage
  • 73/9 - insurer rejects claim for quantity of metal stolen from policyholder's garden

73/06
household contents insurer refuses claim for theft of "minimoto" from policyholder's garage

Mr W was very surprised when his insurer said it would only pay part of his claim, after several items were stolen from his house and garage. The insurer refused to pay for the replacement of his young son's "minimoto" (a very small powered bike), that had been kept in the garage. The reason given was that Mr W's contents and personal belongings policy excluded "Motor vehicles, electrically, mechanically or power-assisted vehicles (other than domestic gardening equipment)".

Mr W argued that the minimoto was not a "motor vehicle" as described in the policy but a child's toy. He said its engine was tiny, it had a top speed of less than 20 mph and it was incapable of being used to transport people from A to B. It could not be used on roads and no motor or motorbike insurance was available for it.

The insurer disagreed. It said the powered bike did fall within the policy definition. It was a power-assisted vehicle and even with the limited engine in the model in question, could reach speeds of up to 35 mph. The insurer added that if minimotos were toys, they would be readily available from toyshops. However, this was not the case and they could usually only be obtained from specialist dealers.

Unhappy with the insurer's stance, Mr W brought his complaint to us.

complaint not upheld
We took account of evidence provided by Mr W that some minimotos were sold as toys and were available from toy shops and toy websites.

However, Mr W acknowledged that his son's minimoto could travel at speeds of over 20 mph. It was therefore difficult to accept his claim that it should be classed as a child's toy. No adult could effectively supervise a child using it. And while we accepted Mr W's point that it was not a means of transport, it was capable of being used for sporting purposes. It was also considerably faster than other powered toys used by children, such as mini cars and go-karts intended for domestic use.

We concluded that in the particular circumstances of this case, the insurer had acted correctly in declining the claim for the theft of the minimoto.

73/07
insurer tells policyholder that "accidental damage" cover does not apply to his damaged lawnmower

Mr M was very annoyed when his insurer refused to pay for the expensive repair work his lawnmower needed, after it was damaged in an accident. He had been confident that his claim would be met, as he had paid an additional premium for "accidental damage" cover when he took out his household contents insurance policy.

The insurer turned down the claim, saying the lawnmower was covered only for specified events, including fire, flood and theft.

Mr M then referred the complaint to us, saying he thought the insurer was attempting to "hide behind the small print" so that it would not have to pay out on what he considered a "perfectly straightforward and valid claim".

complaint not upheld
We examined the policy documents that Mr M had been given when he took out the insurance. Like most household policies, it provided cover against certain specified events including fire, flood and theft.

The terms of the accidental damage cover that Mr M had selected as an "add-on" to his policy were set out very clearly and referred specifically to:

  • "accidental damage to TV, video, hifi, computer or telecommunications equipment; and
  • accidental breakage of glass and furniture and fixed kitchen appliances."

We found nothing to indicate that the accidental damage cover had been described to Mr M in an inaccurate or misleading way. So while we sympathised with his honest misunderstanding about the nature of the cover he had bought, we did not uphold his complaint.

73/08
insurer rejects claim for collapse of garden wall and resulting damage

The retaining wall at the end of Mrs K's garden collapsed after a short period of exceptionally heavy rainfall, causing extensive damage to her garden, garden shed and garden furniture.

However, her insurer turned down her claim. It said that the wall (which was over 140 years old) had collapsed because of its poor construction and its age. Mrs K's policy only provided for specific perils and events, such as storm or flooding. The insurer said there was no evidence of storm conditions or flooding in the period leading up to the collapse of the wall, so there were no grounds on which Mrs K could claim under her policy.

Extremely unhappy with this response, Mrs K instructed a surveyor to inspect the collapsed wall and produce a report about it, which she then sent to the insurer.

The surveyor said the wall had been in a good state of repair. Its collapse had not come about because of its poor construction or its age, but because a substantial amount of water had built up behind it. In the surveyor's view, the wall's age was relevant only in so far as it meant the wall lacked features such as "weep holes" that a more recently-constructed wall would have had - and that might have helped it to withstand the water pressure.

The surveyor's report included weather records showing that in each of the three months before the wall collapsed, the rainfall in that part of the country had been considerably above the regional average. In the month immediately before the wall collapsed, the rainfall was the highest ever recorded in that area for a single month.

The insurer did not respond to Mrs K for some considerable time after receiving this report. When it did eventually contact her, it simply confirmed that its position had not altered and it did not consider there were any grounds for paying her claim. Mrs K then came to us.

complaint upheld
We had little sympathy with the insurer's argument that the faulty construction of the wall was to blame for its collapse. Modern construction methods are not the same as those in use 140 years ago, and insurance cannot be offered on the basis that old structures must conform to more recent building standards.

The more difficult issue to decide was whether the damage to the wall had been caused by "flood". The insurer had been correct in saying no flooding had taken place in the area. However, the problem had not arisen as a result of rising surface water but because of the very rapid build-up of water behind the wall. We concluded that this could, in itself, constitute a "flood". We said the incident was therefore covered under the terms of the policy and that the insurer should pay Mrs K's claim.

We said it should also pay her £750 in recognition of the distress and inconvenience she had suffered as a result of its excessive delay in progressing her complaint and dealing with her queries about it.

73/09
insurer rejects claim for quantity of metal stolen from policyholder's garden

Mr T put in a claim under his household contents policy after thieves removed a large quantity of copper, brass, lead and aluminium from his back garden. The insurer rejected the claim on the grounds that the policy did not cover "scrap metal".

Mr T then complained to us, saying the insurer had acted unfairly and that the claim should be met. He said he had only been keeping the metal in his garden temporarily, until he had time to use it. He had bought some of it in order to repair his front porch and he intended to use the rest to make garden furniture.

complaint not upheld
We examined the terms of the policy and noted that cover was provided for "household goods, valuables, personal money, deeds and documents, business equipment and personal belongings".

The insurer said that this clearly did not include scrap metal or raw materials used in the course of construction work.

We accepted Mr T's evidence that he had been keeping the lead in his garden with the specific intention of repairing the roof of his front porch, and that he had indeed made garden furniture out of the remaining materials in the past. After discussing the complaint with us, the insurer said it was prepared to cover the loss of the lead that Mr T had intended to use for the repair of the front porch. However, it would not pay the remainder of the claim.

We told Mr T that the insurer's offer was a fair one in the circumstances and we advised him to accept it. We did not believe he had been misled about what the policy covered. The lead was intended for household repairs, so it was reasonable for it to be covered under the terms of the household contents policy. However we retained some doubt as to the intended use of the remaining materials. Mr T told us he would accept the insurer's offer.

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ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.