DRN-6313169

The complaint Ms B complains about the settlement she’s received from AWP P&C S.A. (AWP) after making a claim under her travel insurance policy. What happened Ms B has travel insurance underwritten by AWP as part of her bank account. When returning from a holiday, Ms B accidentally left her bag on the plane. This couldn’t be found, so she made a claim to AWP. However, AWP declined Ms B’s claim. Ms B brought a complaint to the Financial Ombudsman Service about AWP’s claim decision. The case was upheld, and the investigator recommended: • The claim be reconsidered in line with the remaining terms of the policy • For any cash settlement due to Ms B, 8% simple interest should be added • AWP should pay the £150 compensation they’d previously offered Both parties agreed with the investigator’s recommendation. During the reassessment of the claim, there were delays and AWP paid Ms B a further £100 compensation. After the claim had been reconsidered, AWP paid £727.92 in settlement of the claim. This included 8% interest (£89.79) as recommended by the investigator, and after deduction of the £75 excess. Ms B complained to AWP about the claim settlement. This was because AWP had applied deductions to the settlement for a number of the items she’d claimed for, including a designer bag. AWP issued a final response to Ms B’s complaint. They said the deductions had been correctly applied and the correct settlement had been paid. As Ms B remained unhappy with the settlement, she brought a new complaint to the Financial Ombudsman Service. One of our investigators looked into things but she didn’t uphold the complaint. She said AWP had fairly and correctly applied deductions to the items claimed for, in line with the policy terms and their internal guidelines. Ms B didn’t agree and asked for a final decision from an ombudsman. 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, whilst I appreciate it’ll come as a disappointment to Ms B, I’ve reached the same outcome as our investigator.

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Ms B’s policy outlines that in the event of a claim for loss of baggage: “Claims will be considered on a ‘new for old’ basis provided the item is less than 2 years old at the date of the incident and you can provide the original purchase receipt. All other items will be subject to a suitable deduction for wear, tear and depreciation, including where proof of age cannot be provided.” So, the policy is clear that AWP will deduct an amount for wear, tear, and depreciation if the item claimed for is more than two years old. Ms B’s claim was for a number of items, of various ages. In AWP’s final response to Ms B’s complaint about the settlement, for each item, they outlined the amount she’d claimed, the deductions they’d applied, and an explanation why the deductions had been applied. I won’t list this in full here as both parties are already aware. Applying a deduction for wear and tear and depreciation based on the age of an item isn’t unusual in travel insurance policies. And AWP isn’t required to outline in the policy terms exactly what deduction will be applied and when, as this will vary depending on the item being claimed for and its age. However, AWP has provided this service with information outlining how and when they apply deductions. I can’t share this information as it is commercially sensitive. However, I’m satisfied that when settling Ms B’s claim, AWP has applied the deductions to the items being claimed for by Ms B in line with this, so I don’t think they’ve treated Ms B unfairly when settling her claim. I recognise, in particular, that Ms B is unhappy with the deduction applied to a designer handbag, which she says was rarely used, so didn’t have signs of wear and tear. However, the bag was over two years old, so there was no requirement under the policy terms for AWP to settle this on a new for old basis. And, as with the other items claimed for, I’m satisfied AWP applied the deduction they did in line with their internal guidelines, and correctly and consistently, and therefore that Ms B’s claim has been settled fairly and in line with her policy.

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My final decision It’s my final decision that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms B to accept or reject my decision before 21 May 2026. Callum Milne Ombudsman

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