AmTrust Specialty Limited · DRN-6270310

The complaint Mr W complains that AmTrust Specialty Limited (‘AmTrust’) intends to proportionately settle the amount they will pay for a claim he made on his property insurance policy due to underinsurance. What happened Mr W held a property insurance policy underwritten by AmTrust. He raised a claim in June 2024 following malicious damage to the property which had caused extensive damage, and he later provided repair quotes totalling around £23,000. AmTrust appointed a loss adjuster to inspect the property who accepted the claim but ultimately determined that the property had been underinsured and said the sum insured of around £51,000 was significantly lower than the property’s rebuild cost which they assessed at around £200,000. AmTrust also provided call recordings which they said showed Mr W had confirmed the figure used and that he'd been made aware of the consequences of underinsurance. And they also provided underwriting evidence which demonstrates the premium would have been higher if the correct rebuild cost had been declared. Because of this, AmTrust applied a proportionate settlement and offered £7,253.91 (less the policy's excess) to conclude the claim. Mr W went on to raise a complaint about how AmTrust had handled the claim. AmTrust considered the complaint, and while they maintained their settlement proposal was correct, they did acknowledge there had been delays in handling the claim and offered £250 compensation. Mr W remained dissatisfied with how AmTrust had handled the claim and their settlement proposal. He said he’d insured the property based on a survey valuation advice from his broker, and that AmTrust had accepted his valuation for several years without raising any concerns. He also maintained that the rebuild cost used by AmTrust was too high. Mr W then brought the complaint to this Service. An Investigator looked at what had happened and concluded that AmTrust settlement proposal was fair. She said she was satisfied Mr W had made a fair presentation of the risk when he took out the policy, as the sum insured reflected the properties market value rather than its rebuild cost. Investigator was satisfied AmTrust had explained the consequences run to insurance and had fairly applied the policy’s proportionate settlement term. And in relation to how AmTrust had handled the claim overall, while she recognised there had been several instances of delays, she thought the £250 compensation was fair and reasonable. Mr W did not agree with the Investigator’s conclusions. He maintained that AmTrust’s valuation was based on a generic calculation that was too high. He said that an earlier survey report from 2019 showed a rebuild cost of £115,000, and he went on to provide a more recent Association of British Insurer’s (‘ABI’) calculation estimate which suggested a rebuild cost of around £170,000. He also said he hadn't been properly advised about rebuild costs when he took out the policy through his broker. AmTrust considered Mr W's further evidence but maintained their position. They said the rebuild cost they had used for the settlement reflected A detailed calculation which was

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based on measurements taken at the property during the claim. The Investigator also agreed that they were not persuaded to change their earlier findings based on Mr W’s new evidence he had submitted. As the complaint has yet to be resolved, it’s been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I should explain that I won’t be repeating the entirety of the complaint history here in my decision or commenting on every point raised. Instead, I’ve focussed on what I consider to be the key points that I need to think about in order to reach a fair and reasonable conclusion. This reflects the informal nature of this Service and our key function; to resolve disputes quickly, and with minimum formality. However, I want to assure both parties I’ve read and considered everything provided. I also need to set out what I can look at as part of this decision. The complaint I am considering here is about AmTrust’s settlement of the claim and specifically their application of a proportionate settlement due to underinsurance. I understand that the policy was not sold to Mr W directly through AmTrust, who used a broker. As such, that means any questions around the sale of the policy or whether Mr W was advised about rebuild costs when he took out the policy through his broker are not issues I can consider in this decision. If Mr W feels the policy wasn’t sold correctly; that would be a complaint he would need to raise with his broker in the first instance. So, the question I need to decide in this complaint is whether it was reasonable for AmTrust to conclude that the property was underinsured, and if so, whether they applied the reduction in settlement fairly. At the time of the claim Mr W raised, the sum insured on the policy was around £51,000. But when AmTrust completed their rebuild calculations after they attended the property, they said the correct sum insured should have been around £200,000. AmTrust said this was based on a BCIS calculation using measurements taken at the property during the claim, and the loss adjuster explained how the calculation was reached. Mr W has also provided alternative figures. He referred to a 2019 survey which suggested to rebuild cost of £115,000, as well as a more recent ABI calculator estimate of around £170,000 (with a range between £133,000 to £216,000). I've considered all of the submissions carefully, and I’m ultimately satisfied that all of the available evidence supports that the property was underinsured. While I accept that Mr W’s evidence suggests a lower rebuild costs than the figure used by AmTrust, Mr W's submissions, in both the survey and the ABI calculator, explain that they are estimates and are based on assumptions with limited information. The survey from 2019 also sets out that the sum it records is more than double the amount Mr W insured the property for. And importantly, even if I were to use Mr W’s lower figure of £170,000 that he has provided, this would still indicate that the rebuild costs were significantly higher than the sum he insured. So, the property would remain materially underinsured in any event. By contrast, AmTrust’s calculations are based on measurements taken at the property and a detailed BCIS assessment. I am ultimately satisfied the evidence they provided supports their decision to proportionately reduce the claim, and I do not find that Mr W’s submitted evidence persuades me that AmTrust’s reduction in the settlement was unfair.

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AmTrust has settled the claim on the basis of the difference in premiums charged had the correct sum insured been disclosed. As the Investigator has previously set out, that’s in line with the relevant law here, which is the Insurance Act 2015, which places responsibility on a customer to make a fair presentation of the risk when taking out an insurance policy. I’ve carefully considered all of the evidence that’s been provided, and I’m ultimately satisfied Mr W didn’t make a fair presentation of the risk. Amtrust has also shown that they would have offered the policy at a higher premium if Mr W had given an accurate sum insured amount. So, because AmTrust has shown Mr W would have been charged a higher premium, AmTrust is entitled to proportionately reduce the amount they pay under the claim. AmTrust has provided a breakdown of the claim relative to the amount of underinsurance and proposed to settle around 31% of the total claim. And, having considered AmTrust’s breakdowns carefully, I'm satisfied it was fair for AmTrust to rely on the sum insured Mr W confirmed and apply a proportionate reduction to the claim. This means I won't be asking AmTrust to increase the settlement amount they have put forward of £7,253.91 (less the policy's excess) to conclude the claim. Finally, I’ve gone on to consider Mr W’s complaint points about how AmTrust handled the claim overall. I can see that AmTrust has already acknowledged that their service fell short during the life of the claim and agreed to pay £250 compensation. So, I do not intend to make an extended finding on whether AmTrust’s service fell short here. But some examples include Mr W having to chase for updates on a number of occasions, and AmTrust not making it clear what the next steps were going to be or how long these stages were likely to take. I can understand why they added to Mr W’s frustration, especially given the impact of the claim on him and the length of time it had been ongoing for. That means I’m satisfied a compensation award is appropriate here. I can also see that the Investigator previously outlined that she felt the compensation offered was fair and reasonable in the circumstances – so, I need to decide whether that’s enough compensation to put things right. I've weighed up Mr W’s testimony, the available evidence, and the length of time the claim took for the period I am able to consider. Overall, I think the compensation AmTrust put forward of £250 is in line with what I would consider to be fair and reasonable in the circumstances of this particular complaint. And I find this sum reflects the scale of inconvenience Mr W experienced in response to AmTrust’s actions, while still remaining proportionate and consistent with the way this Service approaches compensation awards. So, I won’t be asking them to increase this. Putting things right In order to conclude the complaint, Amtrust should: • Pay Mr W £7,253.91 (less the policy's excess) to conclude the claim; and • Pay £250 compensation for distress and inconvenience. My final decision My final decision is that I direct AmTrust Specialty Limited to conclude the complaint in the way I have set out in the “Putting things right” section above.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mr W to accept or reject my decision before 20 May 2026. Stephen Howard Ombudsman

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