Allied World Assurance Company (Europe) dac · DRN-6236744

The complaint Mr A and Ms F complain about Allied World Assurance Company (Europe) dac’s handling of their landlord insurance claim. Any reference to Allied World includes the actions of its agents. What happened Our investigator set out a detailed background of events, and so I won’t repeat this here. Briefly though, Mr A and Ms F held landlord insurance cover with Allied World. In 2020, their rental property was damaged when an explosion and fire occurred at the neighbouring property. Another property in the street was also damaged. A claim was accepted by Allied World in December 2020. There were then significant delays with obtaining access to the neighbouring property which was needed for the party wall to be propped/braced. The majority of the repairs took place to Mr A and Ms F’s property in 2023, though some follow-up work was carried out at the end of 2024. Mr A and Ms F complained about Allied World’s handling of the claim. They thought Allied World had caused avoidable delays and wanted it to pay for loss of rent, reimbursement of additional mortgage payments, a structural engineer’s report, and compensation. Allied World issued a final response on 11 March 2025. It said the majority of the delays were outside its control. However, it accepted it was responsible for some communication issues. It offered £300 compensation for this. It also said that, whilst it was not required to pay for a structural engineer’s report, it agreed to do so on an ex-gratia basis. Unhappy with Allied World’s response, Mr A and Ms F asked this service to consider their complaint. Our investigator looked into things and recommended the complaint be partly upheld. She thought Allied World had caused around three and half months of delay throughout the claim. She therefore recommended that Allied World pay additional loss of rent for this timeframe on a fair and reasonable basis, plus interest. She also recommended that Allied World pay for the structural engineer’s report as previously agreed. Finally, she thought there had been poor communication and recommended Allied World increase its compensation offer to £600 in total. I issued a provisional decision on 3 March 2026. Here’s what I said: ‘I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Industry rules set out by the regulator (the Financial Conduct Authority) say insurers must handle claims promptly and fairly. I’ve taken these rules, and other industry guidance, into account when deciding what I think is fair and reasonable in the circumstances of Mr A and Ms F’s complaint.

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This was a complicated claim involving multiple properties, and therefore different insurers, structural engineers, loss adjusters and surveyors. There were also additional complications due to the multiple changes of ownership of the neighbouring property where the explosion occurred, and a difference of opinion between structural engineers on the propping/bracing of the party wall. Repairs only began at the neighbouring property in September 2022, which was two years after the damage happened. Access was then given to allow the party wall to be propped/braced. Whilst I can of course understand Mr A and Ms F’s frustration with this delay, it’s clear it was outside Allied World’s control. By this point, Allied World had arranged for a surveyor to put together a scope of works and had put the repairs out to tender with a contractor then lined up to start the repairs. So, I don’t think Allied World caused any delays up to this point. The policy covers loss of rent for a maximum of 24 months, and this was paid. Whilst it’s unfortunate that the claim went beyond this timeframe, as I’ve said, this was outside Allied World’s control. However, our investigator concluded that after this time, Allied World caused, in total, avoidable delays of around three and a half months. So, she recommended that Allied World pay loss of rent for this timeframe on a fair and reasonable basis to recognise that the property could have been let out sooner if not for those delays. I’ve thought about whether this is a reasonable outcome. Our investigator considered what had happened up to the date of Allied World’s final response of March 2025. At that point, she said there had been a month’s delay in Allied World closing the claim. I would agree. However, whilst I appreciate Mr A and Ms F were prevented from seeking competitive insurance cover elsewhere whilst the claim remained open, this wouldn’t have impacted their ability to rent out the property. So, I don’t think the delay in closing the claim meant they suffered a financial loss in respect of lost rental income. I understand they ended up putting the house on the market, but if they had opted to let it out again, I think this could have been done after building control had signed off the work. Our investigator also said there was around six weeks of delays due to the structural engineer not providing a revised design for the propping/bracing of the party wall. I don’t disagree with this, though I note the structural engineer did also cause some further delay in respect of the firestopping method, as the product he initially recommended wasn’t deemed appropriate by building control and had to be changed. I should acknowledge that the actual delay in agreeing the propping/bracing design took quite some time, but this was down to a structural engineer for another property disagreeing with the proposals suggested by the structural engineer acting for Allied World (Mr M). Although there was a professional difference of opinion between the engineers, I don’t have enough evidence to say that Mr M’s initial proposals were wrong and caused avoidable delays. Eventually, the various parties came to an agreement about the type of propping/bracing to use and this went ahead. There was then a month’s delay caused by the contractors which held up building control signoff, as they had to return to complete some of the repairs which should have already been completed. So, it’s clear that Allied World did cause some avoidable delays. However, when thinking about whether there’s been financial loss as a result of this, I can’t say that Mr A and Ms F would have received rental payments earlier if not for the avoidable delays caused by Allied World. That’s because, as I’ve said, they chose to sell the property instead of rent it out again. I understand the property hasn’t yet sold. So, I don’t think there is a financial loss

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here. However, I’ve taken the delays into account under a distress and inconvenience award which I’ll address below. Mr A and Ms F want Allied World to cover their additional mortgage costs of around £650 per month. They say they were forced to stay with their mortgage provider and incur this higher monthly cost rather than remortgage elsewhere. That’s because the new mortgage lender required a structural survey confirming the property was structurally sound, and Allied World refused to obtain this for them. I note that for some months prior to this, Mr A and Ms F had been asking Allied World to arrange for their property to be assessed for structural damage and a report obtained confirming it was structurally sound. In insurance claims where significant structural repairs have been undertaken, I’d expect an insurer to issue a certificate of structural stability, so the insured could then show this to any interested parties (such as a future buyer). Though my understanding here is that whilst a structural engineer advised on propping/bracing the party wall, this was to prevent any structural damage happening to Mr A and Ms F’s property whilst repair work was being carried out to the neighbouring property. Although there were some gaps in the party wall that required filling, there wasn’t any structural damage to Mr A and Ms F’s property that needed repairing. So, I wouldn’t expect Allied World to have provided a certificate of structural stability. I understand that Mr A and Ms F’s mortgage lender wanted the report because of the structural damage to the neighbouring property, rather than any structural damage to their property. As the surveyor and structural engineer had no concerns about any structural damage to Mr A and Ms F’s property, I agree with Allied World that there wasn’t a need for it to arrange to have the property assessed and a report provided confirming the structural stability of the property after the repairs were completed. The surveyor confirmed to the parties in writing that there was no evidence of structural movement affecting the property. So, I don’t require Allied World to pay for the additional mortgage costs that Mr A and Ms F incurred until the structural report was obtained by them in February 2025. Allied World later agreed to reimburse Mr A and Ms F for the cost of the structural report on an ex-gratia basis. That was up to Allied World, but as I’ve said, it didn’t need to do this. If it hasn’t yet reimbursed Mr A and Ms F for this, I would suggest they contact Allied World directly about this. Mr A and Ms F have also said they’ve incurred financial loss in respect of some utility bills. I haven’t seen any evidence relating to this, but if this is still the case then I would suggest Mr A and Ms F send evidence of this to Allied World for it to consider. I’ve noted Mr A and Ms F had some concerns about the remaining repairs being carried out by the neighbour, who is also a builder. The situation was unusual here, as the majority of the repairs were completed by a contractor arranged by Allied World. However, some of the outstanding repairs could only take place once certain work had been done to the neighbouring property. Since the neighbour was reinstating his own property, it was agreed for him to complete the outstanding repairs to Mr A and Ms F’s property once he reached roof level of his own property. Mr A and Ms F raised some legitimate concerns about this suggestion. They were worried their neighbour wouldn’t pass the same vetting process as Allied World’s own contractor would and also had concerns about a lack of insurance and guarantee of workmanship. Some of these concerns were addressed and ultimately Mr A and Ms F did agree for their neighbour to do the remaining work, and a cash settlement was paid to them by Allied World for this.

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I think Allied World could have handled this situation better than it did, and in particular, it ought to have involved Mr A and Ms F in the discussions with the neighbour earlier on. However, I note the surveyor did tell them at one point that if they were unable to accept the repairs being completed by the neighbour, the original contractor would need to be asked to return to finish the works. I think if Mr A and Ms F had remained uncomfortable with their neighbour completing the outstanding repairs, they could have refused this and arranged for their own contractor to provide a quote or pushed for the loss adjuster to arrange for the previous contractor to complete the repairs. Nonetheless, I’ve again taken this into account under an award for distress and inconvenience because as I’ve said, I think Allied World could have handled the matter better than it did. Although this was a complex claim, I agree with our investigator that Allied World’s communication and handling of the claim was often poor. I think the communication issues with both the claim and complaint were complicated by the involvement of various parties, and this meant Mr A and Ms F often had to chase different people for updates as well as liaise between the various parties. Mr A and Ms F’s queries sometimes went unanswered which was understandably frustrating for them, and they also had to chase the loss adjuster for payments on a number of occasions. Also, despite making it clear that any communication should be sent to both Mr A and Ms F, this didn’t always happen causing further unnecessary frustration. It’s also the case that a subcontractor’s poor workmanship on the roof led to water ingress during a storm and the collapse of the kitchen ceiling. Whilst this didn’t delay the overall repairs, it’s clear this caused Mr A and Ms F a significant amount unnecessary inconvenience and distress as they had to clean up the mess and try and prevent further damage from happening. Taking everything into account, I intend to require Allied World to pay total compensation of £2,000. I think the distress and inconvenience caused to Mr A and Ms F by the delays and Allied World’s handling of the claim that I’ve described above fits the category we describe on our website as: ‘An award of over £1,500 and up to around £5,000 is appropriate where the mistakes cause sustained distress, potentially affecting someone’s health, or severe disruption to daily life typically lasting more than a year…’ I asked both parties for any further comments they wanted to make before I made a final decision. Allied World responded to say it accepted my provisional findings. Mr A and Ms F responded with the following main points: • I said in my provisional decision there had been around a one-month delay in closing the claim, but it was much longer. They asked the surveyor on 12 February 2025 if the claim could be closed, given the final payment had been made by Allied World on 18 December 2024. However, they weren’t told the claim had been closed until 16 June 2025. As a result, they were unable to obtain alternative insurance for the property, or move forward with plans to rent the property. • Firestopping issues were identified during the repair process in 2023. Discussions about appropriate remedial methods took place. The firestopping works were completed by their neighbour/builder and agreed by building control in July 2024. The

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only element that remained outstanding which was dependent on the neighbouring property’s construction reaching the appropriate stage related to flashing works. • The involvement of building control in September 2024 arose because the replacement of the roof in early 2023 should have been subject to building regulations. When building control attended, they also identified that some of the previously completed repairs required further improvement before certification could be granted. Additional remedial work was also needed in relation to firestopping and insulation. The need for the contractors to return arose following the building control inspection, but the building control inspection should have happened when the roof was replaced. • In September 2024, they remortgaged the property onto a buy to let mortgage. Their intention at that time was to return the property to the rental market. The later decision to explore a potential sale should not be used to retrospectively determine their intentions during the earlier period when the delays occurred. • Following building control sign-off in November 2024 the repair work had been completed, and the property could have been returned to the rental market. However, they were informed by multiple providers and brokers that landlord insurance couldn’t be provided whilst the existing claim remained open. Therefore, they were prevented from renting out the property until the claim was closed in June 2025. • The structural engineer’s involvement related mainly to the stability of the party wall and the design of the temporary propping. A full structural survey of their property wasn’t undertaken. Their mortgage lender’s request for a structural engineer’s report arose because the lender’s surveyor had noted potential structural movement affecting their property. Therefore, it was understandable the lender wanted reassurance from a structural engineer before proceeding with the remortgage. • They are concerned the award of £2,000 combines a number of issues. They pointed out the investigator had considered them separately, including recognition of avoidable delay which prevented the property being returned to the rental market. The investigator recommended a loss of rent payment, reimbursement of the structural engineer’s report, and a separate award for distress and inconvenience. • I had said Allied World would reimburse the structural engineer’s report on an ex- gratia basis. As this cost arose as a direct consequence of the incident and subsequent repairs, they would be grateful if my final decision could note this position so the matter can be resolved without the need for further separate correspondence. • They’ve provided these clarifications to ensure the final decision accurately reflects the chronology of events. They hope the additional context is taken into account when I decide the final outcome. 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’ve noted Mr A and Ms F’s comments about the delay in closing the claim. However, I’ve only considered what happened up to the date of Allied World’s final response of 11 March 2025. Whilst the repairs were completed in December 2024, there were ongoing communications between the parties about a structural engineer’s report. The loss adjuster

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then had to write up a final report before Allied World could close the claim. Based on this, I remain satisfied there was around a month’s delay in Allied World closing the claim as of the date of its final response. If Mr A and Ms F want to complain about any delays after this date, they would need to make a new complaint to Allied World in the first instance. Mr A and Ms F have provided some clarification around the firestopping and the need for building control. In my provisional decision I said that the structural engineer had caused some delays in respect of the firestopping method as the product he initially recommended wasn’t appropriate. I was aware the firestopping work had been completed by the time building control visited in September 2024, though I understand the neighbour/builder previously met with a building inspector to agree a different firestopping method when it became known the one recommended by the structural engineer wasn’t appropriate. This was the delay I was referring to. Mr A and Ms F have said that Allied World ought to have arranged for building control sign- off after the roof repairs were carried out, but it didn’t do so. As I understand it, Mr A and Ms F asked Allied World for building regulation certificates for the repairs carried out and this led to the surveyor arranging for building control to attend in September 2024. It was then confirmed the roof repairs needed a building regulations application, and so this needed to be done retrospectively. Building control also identified during the visit that work already carried out by Allied World’s contractors needed improving, and so the contractors had to return to do this work. I said in my provisional decision that this caused around a month’s delay, because Allied World’s contractors had to reattend to complete the work. I take Mr A and Ms F’s point that the building regulations application ought to have been submitted in 2023. Though it seems the other repairs were also subject to building control’s inspection, and so presumably this still needed to go ahead once the repairs were completed in 2024. In any event though, it’s clear there was an unnecessary delay as Allied World’s contractors had to reattend to carry out remedial work to the repairs. In my provisional decision, I set out why I wasn’t persuaded that Mr A and Ms F had experienced a financial loss in respect of loss of rent because of the delays caused by Allied World. I thought they could have put the property back on the rental market after building control had signed off the repairs, but they didn’t do so and instead chose to put the property on the market to sell. In response to my provisional decision, Mr A and Ms F have said that in September 2024 they remortgaged on to a buy to let mortgage which carried a higher interest rate than a standard residential mortgage. And that this decision was taken because they intended to return the property to the rental market at that time. They’ve said they were prevented from doing so because they were told that landlord insurance couldn’t be provided whilst the claim remained open. Whilst I understand Mr A and Ms F wanted to remortgage in September 2024, they told Allied World at the time that this couldn’t go ahead due to the lender’s requirement for a structural survey. So, they had to remain with their existing interest-only mortgage lender. I understand the survey only took place in February 2025. Presumably the remortgage then went ahead. Although I can appreciate why a prudent mortgage lender would want a structural survey carried out given the damage that had taken place to the neighbouring property, I’ve already explained in my provisional decision why I don’t think Allied World needed to arrange for the structural survey.

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Mr A and Ms F believe the delay with Allied World closing the claim meant they couldn’t take out landlord insurance with another provider and therefore they couldn’t rent out the property. Though as far as I’m aware, they still held landlord insurance with Allied World. So, I still think they could have rented out the property from November 2024 after building control had signed off the repairs, but they chose not to do so. I therefore can’t reasonably conclude that Mr A and Ms F would have received rental payments earlier if not for the delays caused by Allied World. Consequently, I remain of the opinion that Mr A and Ms F didn’t experience a financial loss in respect of loss of rent. Mr A and Ms F would like me to require Allied World to reimburse them for their structural engineer’s report. However, as set out in my provisional decision, I don’t think Allied World needed to arrange for a structural engineer to carry out an inspection, and therefore I won’t be requiring Allied World to do this. However, Allied World has offered to do this on an ex- gratia basis, and so Mr A and Ms F should get in touch with it directly if they still want this payment reimbursed. Mr A and Ms F have questioned why my intended compensation award of £2,000 combines a number of issues, whereas our investigator set out various payments separately. That’s because I disagreed with the findings our investigator reached in respect of loss of rent and the structural engineer’s report. Though I thought the amount of compensation Allied World should pay for distress and inconvenience should be higher than the amount our investigator recommended. In arriving at the £2,000 compensation sum I took into account Allied World’s overall handling of the claim, including delays. I remain satisfied that, taken in the round, this amount is reasonable and reflects the impact caused to Mr A and Ms F by Allied World’s handling of the claim. My final decision My final decision is that I partly uphold this complaint. I require Allied World Assurance Company (Europe) dac to pay Mr A and Ms F £2,000 total compensation (less any amount already paid).* *Allied World must pay the compensation within 28 days of the date on which we tell it Mr A and Ms F accept my final decision. If it pays later than this, it must also pay interest on the compensation from the deadline date for settlement to the date of payment at 8% a year simple. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr A and Ms F to accept or reject my decision before 16 April 2026. Chantelle Hurn-Ryan Ombudsman

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