DRN-6155410

The complaint Mr S complained that Accredited Insurance (Europe) Ltd (“Accredited”) unfairly declined his claim, following an escape of water, and cancelled his home buildings insurance policy. What happened Mr S was on holiday when a family member found a leak in his home originating from a first floor bathroom. This caused damage to the room below. On return from holiday he contacted Accredited to make a claim. Mr S said he was told the claim would be accepted. At this time he had building work ongoing that he hadn’t told Accredited about. He said the business arranged for holes to be made in the walls and floor to aid drying. It then told him his claim had been declined and his policy had been cancelled due to the building work. Mr S didn’t think this was fair. He said the one storey extension at the rear of his property had nothing to do with the leak. So he complained. In its final complaint response Accredited told Mr S that his policy terms require him to inform it of any building works at his home. It said had it been aware of the work it would have cancelled the policy effective from 7 May 2025. This is when the existing extension was demolished, prior to the new one being built. Mr S didn’t accept Accredited’s decision and referred the matter to our service. Our investigator upheld his complaint in part. He said the business had declined the claim and cancelled cover in line with its policy terms. But it had provided poor service when it told him not to worry about the building works. To put this right he said Accredited should pay him £100 to apologise for the distress and inconvenience this caused. Mr S disagreed with our investigator’s findings and asked for an ombudsman to consider his complaint. It has 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. Having done so I’m upholding Mr S’s complaint in part. Let me explain. Mr S’s policy terms say: “Changes in your circumstances we need to know about You must tell us about any changes to the answers you gave us when taking out this policy and any changes in your circumstances which happen during the period of insurance.. It is importance that you tell us about a change before it happens or as soon as you know about

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it.” The examples of what changes Accredited needs to know about, set out in the policy terms include: “If you are having any building work done.. You must tell us before the start of any building work, conversions, renovations, demolitions and extensions at your property.. You must tell us about the work at least 30 days before it starts.. ..When you tell us about a change we will let you know if it will affect your insurance. For example we may change the terms of your insurance, you may have to pay more for your insurance, or we may cancel your insurance in line with the Cancellation section below.” These terms are commonly used by insurers. We don’t think this is inherently unfair. Building works can present additional and heightened risks, which insurers must be aware of when providing cover. I’ve seen the questions Mr S was asked when he first took out the policy in March 2022. He was asked if there were any renovations, major alterations, or structural building work currently taking place or due to take place in the next 30 days. He confirmed that there wasn’t. This was correct at the time. But Mr S’s terms are also clear that he must tell Accredited about any changes during the policy term. Mr S’s policy renewed in April 2025. I’ve seen the renewal document he was sent. Mr S’s policy has an online account. The full policy terms were uploaded to this account on each renewal. Mr S doesn’t dispute this. So, based on this information Accredited made its terms clear. Mr S didn’t tell the business it he was demolishing an extension and building a new one. I think the terms are clear that this should have been declared. Accredited has supplied an excerpt from its underwriting criteria. This is considered commercially sensitive information, so I can’t share it in full. But I’m satisfied from this that had Mr S declared the building work Accredited would have cancelled his policy from the date the work began. I can understand Mr S’s comments that the building work had nothing to do with the leak. I can’t see that this is in dispute. But it isn’t relevant to why the policy was cancelled. Mr S had an obligation to make Accredited aware of the building work in advance. Had he done so I’m satisfied the business would have cancelled his policy at that time. I can see that Accredited began work to dry the property out. This included making holes in the walls and the removal of flooring. I acknowledge Mr S’s comment that he will have to pay to have this repaired. But from what I’ve read this was necessary in order to dry the property. I empathise with the position he is in. However, this is something he would have had to arrange anyway. From the information provided Accredited was aware of the demolition and building work at Mr S’s property shortly after he made his claim. He refers to living in a damaged house that smelt of damp whilst his claim was considered. However, he was under the impression his claim was going to be accepted. This was based on the information he’d been given by Accredited’s agents. I can see that Mr S has provided a record of a call he received when this was confirmed. The business said it doesn’t have a recording of this call due to a change in its telecoms provider. But I have no reason to doubt Mr S’s recollection. I can understand that this caused him some distress and potentially prevented him arranging repair work earlier. Because of this I

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agree with our investigator that Accredited should pay Mr S £100 compensation. In summary, I don’t think Accredited treated Mr S unfairly when it relied on its policy terms to decline his claim and cancel his policy. I am aware that a pro-rata refund of his premiums has been provided backdated to 7 May 2025, which is fair. But Accredited’s agents should not have indicated Mr S’s claim would be accepted, when this was not known. To acknowledge the distress and inconvenience this caused it should pay him £100. My final decision My final decision is that I uphold this complaint in part. Accredited Insurance (Europe) Ltd should: • pay Mr S £100 compensation for the distress and inconvenience it caused him. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S to accept or reject my decision before 25 May 2026. Mike Waldron Ombudsman

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