DRN-6196659

The complaint Mr T complains on behalf of his mother, Mrs T, that Lloyds Bank General Insurance Limited unfairly dealt with Mrs T’s escape of water claim under her buildings insurance policy. As Mr T brought the complaint to our Service and has dealt with matters on Mrs T’s behalf, I’ve mainly referred to him in this decision. References to Lloyds includes its agents and surveyors acting on its behalf. What happened Mrs T held a building insurance policy with Lloyds for a property she owned. In August 2025, Mr T discovered there had been a leak at the property, which had been unoccupied for a period. He believed water had escaped from the bath pipework and made a claim to Lloyds. Mr T wanted a cash settlement because he’d already been planning changes to the bathroom to make it more suitable for Mrs T, who has mobility issues. Lloyds arranged an inspection. Its surveyor identified water damage to the bathroom, hallway, and kitchen, and Lloyds offered a cash settlement of £2,733.84 based on what it said it would cost its own suppliers to carry out the works. Mr T didn’t agree with the scope or settlement amount. He works in the industry and provided his own estimate for £15,030.80. Lloyds didn’t agree to that, so Mr T complained. Lloyds apologised for some poor service, paid Mrs T £350 compensation, and agreed to appoint another surveyor. The second surveyor increased the scope in some areas. But he concluded the kitchen damage wasn’t caused by the bathroom leak, which was on the other side of a solid masonry wall. He thought it was more likely caused by a leak from the fridge-freezer. Lloyds said this was a gradually operating maintenance issue and wasn’t covered. It removed the kitchen from the scope and made a final settlement offer of £5,125.83, which it later paid. Mr T complained again. He said the kitchen damage should be included, the scope was still too narrow, the hallway carpets should be included, and there’d been other service issues. Lloyds didn’t agree with most of these points. But it accepted there’d been a loss of expectation and further poor service, so it paid a further £800 compensation. Mr T referred the complaint to our Service. Our investigator thought Lloyds should include the kitchen damage, reconsider its settlement based on Mr T’s scope, include the hallway carpets, and increase the total compensation to £1,500. Lloyds didn’t agree. But it offered to cover the carpets and pay a further £50 compensation, bringing the total to £1,200. Because Lloyds didn’t agree with the investigator’s outcome, the complaint was passed to me. I shared my initial thoughts with both parties. I said I was likely to find Lloyds’ latest offer was enough to fairly resolve the complaint.

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Mr T didn’t agree. He explained in more detail why he thought the kitchen damage was caused by the bathroom leak. He said he’d only dried out the bathroom, and he pointed to water damage in the hallway as evidence water had travelled from the bathroom. He accepted the fridge-freezer was leaking but said this was minor. He also maintained that his scope of works was reasonable and Lloyds’ wasn’t. As the matter remained unresolved, I’ve issued this final decision. 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 satisfied Lloyds’ latest offer is fair. So, I’m only requiring Lloyds to carry out its offer of including the hallway carpets and paying a further £50 compensation. I’ve explained my reasons below. If I haven’t commented on a particular point or piece of evidence it’s not because I haven’t thought about it. Rather, it doesn’t change what I consider to be the fair outcome. Kitchen damage The key issue is whether the kitchen damage was most likely caused by the escape of water in the bathroom or by the fridge-freezer. Where the facts are in dispute, I’ve decided what I think is most likely to have happened based on the available evidence. Mr T says water from the bathroom leak travelled beneath the floor structure, across a membrane, and into the kitchen, which is on the other side of a solid masonry wall. He says he didn’t dry out the kitchen, only the bathroom. He also points to damage in the hallway as evidence that the water travelled away from the bathroom. Lloyds’ surveyor thought the kitchen damage was more likely caused by an ongoing leak from the fridge-freezer. He identified standing water directly beneath the appliance and a pattern of damage he didn’t think was consistent with the bathroom being the main cause. I’ve considered both explanations carefully, along with all the evidence provided. Having done so, I’m more persuaded by the conclusions of Lloyds’ surveyor. The most important evidence in my view is that the surveyor found standing water pooling on top of the floor directly beneath the fridge-freezer. The pattern of damage to the kitchen floor was also concentrated under and in front of the fridge freezer. I haven’t seen evidence of standing water on top of the floor in other areas, such as the hallway. The inspection also took place several weeks after the bathroom leak was discovered. The property had been unoccupied before then, so I can’t establish the exact sequence of events with certainty. But Mr T has accepted the fridge-freezer was leaking even if he says this was minor. Given the standing water was directly beneath the fridge-freezer, I find the surveyor’s conclusions persuasive. I accept the hallway damage shows that the water travelled away from the bathroom. But the photos show that this damage was mainly directly outside the bathroom door. That area isn’t separated from the bathroom by a masonry wall like the kitchen is. So, I don’t find the hallway damage persuasive evidence that water also travelled into the kitchen. I’ve considered Mr T’s point that the water could have travelled along the membrane,

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through the wall, and into the kitchen. The evidence I’ve seen shows the chipboard subfloor butts up against the wall and doesn’t pass through it. The only evidence I’ve seen of the subfloor and membrane extending across into the kitchen is via a service void. But that void emerges around a metre to the side of where the standing water was found. I would expect to see more significant moisture around the void if that had been the route the water took. I accept the kitchen hadn’t been dried in the same way as the bathroom. Even taking that into account, I wouldn’t reasonably expect to see standing water sitting on top of the chipboard in one specific location several weeks later if it had come from the bathroom leak. Taking everything into account, I find the kitchen damage was most likely caused by the leaking fridge-freezer, not the bathroom leak. The surveyor has explained why this was most likely related to the appliance’s condensate drainage system. I haven’t seen evidence to disagree with Lloyds’ categorisation of this as a gradually occurring maintenance issue, which is excluded by Mrs T’s policy. So, I consider it fair for Lloyds to have excluded the kitchen damage from its scope of works. Scope of works and settlement Mr T says Lloyds’ scope of works and settlement were insufficient. He relies on his own estimate. Lloyds says its settlement is fair based on the scope provided by its second surveyor and the amount it would pay its own suppliers. I’ve considered Mr T’s points, but I’m more persuaded by Lloyds’ scope. I say this because some parts of Mr T’s estimate appear to go beyond what would reasonably be needed to reinstate the insured damage. For example, it includes larger areas of tiling than appear necessary, and additional labour costs for removing and storing the bath, which I’m not persuaded are required. Mrs T’s policy schedule shows she didn’t have matching sets cover. This limits the extent to which undamaged items like tiles would need to be included in the settlement. I agree that Lloyds’s initial scope was insufficient. But Lloyds then arranged a further inspection by a more senior surveyor and increased its offer. Mr T chose to take a cash settlement rather than have Lloyds carry out the works. In those circumstances, Lloyds was entitled to base its settlement on the amount it would pay its own contractors to repair only the insured damage. I’m satisfied this is what Lloyds has done. So, I’m not requiring Lloyds to increase the settlement. Compensation I’ve considered whether the compensation offered by Lloyds is fair. Mr T has dealt with the claim on Mrs T’s behalf and has spent significant time pursuing it. I recognise the effort involved in that. However, I can only award compensation for the impact to an eligible complainant. In this case, that’s Mrs T as the policyholder. So, I can’t make an award for any impact on Mr T personally. I’ve considered the impact on Mrs T up to Lloyds’ final response in November 2025, which is the period covered by this complaint. I understand Mrs T has health and mobility issues and that the situation with the bathroom has been difficult for her. I’m also sorry to learn that she injured her foot, which must have

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made things worse. I accept Lloyds caused delays and confusion, which would have caused Mrs T unnecessary inconvenience and worry. Our published guidance on compensation says an award between £750 and £1,500 can be fair where there’s been substantial distress, as well as serious disruption to daily life over a sustained period. Lloyds has paid £1,150 and has offered a further £50. Taking everything into account, I’m satisfied £1,200 in total is fair and reasonable. So, I require Lloyds to pay the further compensation it’s offered, if it hasn’t done so already. Carpets Lloyds has accepted that the hallway carpets should be included under the contents cover on the policy. I’m satisfied that’s fair. Alternative accommodation Mr T has raised concerns about what will happen to Mrs T’s living situation when the work starts. I’ve seen that Lloyds offered to contribute towards Mrs T’s living costs if she chooses to stay with friends, or alternative accommodation costs if she chooses to move out. It also offered for Mrs T to use its relocation company. I’m satisfied that was fair. If Mr T or Mrs T are unhappy with Lloyds’ handling of alternative accommodation after the works begin, they can raise that with Lloyds as a new complaint. Putting things right To resolve the complaint, if it hasn’t done so already, I require Lloyds to: • Settle the claim for the hallway carpets in line with the policy terms. • Pay Mrs T £1,200 of total compensation for distress and inconvenience, less any compensation already paid. My final decision I uphold Mrs T’s complaint to the extent that I require Lloyds Bank General Insurance Limited to do as I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs T to accept or reject my decision before 25 May 2026. Chris Woolaway Ombudsman

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