INTACT INSURANCE UK LIMITED · DRN-6199944

The complaint Mr B has complained about the amount INTACT INSURANCE UK LIMITED has offered to settle a claim he made on his buildings insurance policy. Reference to Intact includes its agents and representatives. What happened The circumstances of this complaint aren’t in dispute, so I’ll summarise the main points: • Mr B took out a buildings insurance policy through an independent intermediary I’ll call G. It was underwritten by Intact at the 2024 renewal. • Mr B got in touch with Intact following damage caused by bad weather. Intact accepted the claim on the basis there was some storm damage, but a dispute arose about how much it should pay to settle the claim. The key issues were: o Mr B sent Intact a quote to replace the entire roof for £47,000. Intact thought the storm damage was limited to a small area and repairs to put it right would cost around £2,500. Whilst Intact recognised there was damage beyond this area, it thought the other damage hadn’t been caused by the storm. o Intact offered to settle the claim at 46% of its value on the basis that Mr B had provided inaccurate information about the declared value and flat roof percentage, which meant he’d paid a lower premium than he should have. o Mr B said rain got into the building and caused internal damage. And that meant he was suffering a loss of rent. o Mr B said he’d paid £850 for temporary roof repairs. Intact agreed to include this within the settlement if Mr B provided evidence of his expenditure. • Mr B complained about the claim settlement offer, but Intact maintained its position. • Our investigator agreed with Intact’s position in relation to the extent of storm damage to the roof and the proportionate claim settlement. But she thought Intact should reconsider the claim for internal damage and loss of rent – and pay £250 compensation. • Intact agreed to this suggestion. Mr B didn’t think the suggestion went far enough. As an agreement wasn’t reached, the complaint has been passed to me. 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. • When considering what’s fair and reasonable in the circumstances I’ve taken into account relevant law and regulations, regulators’ rules, guidance and standards, codes of practice and, where appropriate, what I consider to have been good industry

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practice at the time. Whilst I’ve read and taken into account everything said by both parties, I’ll only comment on the points I think are relevant when reaching a fair outcome to this dispute. That’s a reflection of the informal nature of this Service. • There are a number of points to consider, so I’ll take each one separately. Proportionate settlement • Intact said it would proportionately settle the claim at 46% of its value. It did this because it didn’t think Mr B provided reasonable information when renewing the policy in 2024. • Intact isn’t responsible for the independent intermediary, G, who renewed the policy for Mr B. So I won’t be able to consider the actions and responsibilities of G in this complaint. Mr B is entitled to make a separate complaint about G if he wishes. • As Mr B is a commercial customer for this policy, the law about the information he should provide at a renewal, and the options an insurer can take in response to that, is the Insurance Act 2015 (“the Act”). • The Act says, in summary, that Mr B was responsible for making a ‘fair presentation’ of the risk. If he fulfilled that duty, Intact can take no action. If Intact can show he didn’t fulfil that duty, and Intact can show that it would have acted differently if he had fulfilled that duty, the Act sets out the remedies available to Intact. Depending on the circumstances, that can include settling the claim proportionately. • To renew the policy in 2024, Intact wanted Mr B to provide a ‘declared value’. According to the policy, the declared value should reflect the cost of reinstating the property, at the date of the renewal. • So the question is whether £1,300,000 amounted to a fair presentation. In other words, was it a reasonable estimate of the reinstatement cost, based on what Mr B knew, or ought reasonably have known, at the 2024 renewal? • Mr B said he thought £1,300,000 was a reasonable estimate of the market value of the building at that time – and the reinstatement cost is usually less than the market value. I haven’t seen any professional surveys, valuations or the like to support Mr B’s position or otherwise show £1,300,000 reflected the likely reinstatement cost at the relevant time. • Intact took steps to estimate the reinstatement cost using accurate measurements, considering the different building types separately, and applying recognised building rates to the calculations. I’m satisfied this was a reasonable approach to estimating the reinstatement cost. And, as it’s the only professional estimate I’ve seen, it’s the most persuasive evidence available. The estimate was for over £2,600,000, or around twice as much as Mr B’s estimate. So the difference is considerable. • There are a range of reasonable estimates in these circumstances – Mr B doesn’t necessarily have to arrive at the exact same estimate as Intact in order to make a reasonable estimate and fair presentation. But I’m not satisfied an estimate of around 50% is within the reasonable range, given the difference of over £1,000,000.

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• Mr B is entitled to take his own professional advice if he would like to challenge Intact’s estimate. But, based on the evidence available to me, I’m satisfied Intact has shown his declared value was unreasonable in the circumstances. • At the 2024 renewal, Intact also wanted to know whether the roof was made of certain materials it considered to be ‘standard’ construction. If not, it would find out more about the construction of the roof. • Mr B said the roof was made of the materials Intact considered to be ‘standard’. That meant Intact wasn’t prompted to find out more about the roof, as it had no reason to consider it might contain any areas of ‘non-standard’ construction. So, the question is whether Mr B’s statement was reasonable in the circumstances? • It doesn’t seem to be in doubt that some parts of the roof are made of felt or timber. Neither of these materials were on Intact’s list of ‘standard’ construction materials. So I’m satisfied Mr B’s answer was unreasonable in the circumstances. • As Mr B gave two unreasonable answers, I’m not satisfied he made a fair presentation. Intact has shown that, if Mr B had given reasonable answers, it would still have offered the policy, but charged a higher premium. And that meant Mr B paid 46% of the premium he should have done. In line with the Act, Intact is therefore entitled to proportionately settle the claim at that percentage. As this is what Intact has offered to do, I’m satisfied it’s acted fairly on this point. • Mr B has suggested Intact ought to have surveyed the building before accepting the renewal. And, if it had done so, these matters would have come to light and been avoided. Put simply, Intact isn’t required to do this by the Act. And nor did it commit to doing this in its policy documents. The onus was on Mr B to make a fair presentation. He was entitled to support and guidance from G when doing this – but that’s a separate matter and not something I can consider against Intact. Storm claim – external damage • The policy covers damage caused in certain ways only, including by storm. Intact accepted some of the roof damage had been caused by storm strength winds. It valued the repair of this damage at £2,500. I haven’t seen an alternative quote for these repairs that might challenge the valuation, so I accept it’s a fair value on the strength of the available evidence. • Mr B initially submitted a quote for £47,000 for a new roof. If the entire roof had been damaged by storm, or the extent of storm damage reasonably necessitated an entire new roof in order to carry out a lasting and effective repair of the storm damage, I may expect Intact to settle the claim by paying for a new roof. But I don’t think the evidence provided shows this to be the case. I’ll explain why. • Intact had a surveyor inspect the roof. They said they saw evidence of wear and tear and damage unrelated to the storm winds, as well as the storm damage. They didn’t think the extent of storm damage meant the roof needed to be fully replaced. • The quote Mr B provided is just that – it doesn’t comment on the cause(s) of the damage and/or explain why the storm damage alone would prompt full roof replacement. Mr B hasn’t provided any other professional opinion that might challenge what Intact has said. I note Mr B said there were “so many leaks”, “so many issues” with the roof, and “so many different parts which needed replacing”.

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• So it seems clear there are numerous problems with the roof. But, apart from the area accepted by Intact as storm damage, it’s unclear how the remainder could also have been damaged by storm. The evidence available strongly indicates the remaining damage is more likely to have been caused by wear and tear than by storm. And wear and tear damage isn’t covered by the policy. As a result, I’m satisfied Intact has offered to cover the damage caused by storm. It’s therefore acted in line with the policy and fairly overall. • Mr B is entitled to obtain his own professional advice if he would like to challenge Intact’s position on this point. • Mr B also said he paid £850 for temporary repairs. Intact has offered to include this cost within the claim settlement, if he provides evidence of his expenditure. I’m satisfied that’s a fair approach. So it’s open to Mr B to provide Intact with that information if he’d like to claim for it. Storm claim – internal damage • It’s clear there was water damage internally. Mr B would like to claim for this. The policy covers damage caused by storm. It also covers damage caused by ‘any other accident’, which might be relevant in these circumstances. So, if any of the internal damage was caused by storm or ‘any other accident’, it might be covered – subject to the terms and conditions of the policy. • Intact initially declined the internal damage outright. Following our investigator’s suggestion, Intact has agreed to reconsider its position. • Given the extent of water damage internally, and noting many of the roof problems were caused by wear and tear, I don’t think it’s clear how much, if any, of the internal damage may be covered by the policy. So it wouldn’t be fair for me to require Intact to pay for all of the internal damage or to guess how much might be covered. • In these circumstances, I consider it’s in line with the policy terms and fair overall for Intact to reconsider the internal damage. Loss of rent • I understand Mr B has been unable to rent out the building in full due to the damage, so he’s lost out on some of his usual rental income. • The policy covers loss of rent subject to a number of terms and conditions. Following our investigator’s suggestion, Intact has agreed to reconsider a loss of rent claim, though it will likely need to consider the internal damage claim first. • Again, I don’t think it’s clear at this stage whether Mr B’s loss of rent is covered by the policy – or how much his loss of rent might be. So it wouldn’t be fair for me to require Intact to pay loss of rent or to guess how much might be covered. • In these circumstances, I consider it’s in line with the policy terms and fair overall for Intact to reconsider the loss of rent. Compensation

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• Our investigator thought Intact should pay £250 compensation for the delay dealing with the internal damage part of the claim. Intact agreed to do so. I don’t think Mr B has challenged this point in particular. And I consider it a fair and reasonable amount in the circumstances. So I don’t think this point needs further discussion. • I’m satisfied Intact should pay £250 compensation. My final decision I uphold this complaint. I require INTACT INSURANCE UK LIMITED to: • Reconsider the claims for internal damage and loss of rent, subject to the policy terms and conditions. • Pay £250 compensation. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 22 April 2026. James Neville Ombudsman

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