Liverpool Victoria Insurance Company Limited · DRN-5921596

The complaint Mr P complains about the way Liverpool Victoria Insurance Company Limited handled a claim he made on his commercial property insurance policy for damage to his rental home. What happened Mr P’s tenants caused damage to his rental property. He made a claim to LV but it declined it. It said given the damage happened over a period of time, it wouldn’t be covered under the ‘accidental damage’ section of the policy. It also said the damage wasn’t covered under the vandalism peril. Mr P was unhappy with LV’s response and complained. LV issued a complaint final response letter (FRL), but it didn’t change its position. So Mr P referred matters to this Service. Our Investigator recommended the complaint be upheld in part, she thought some of the damage should be covered by the policy. Mr P was happy that some of the damage was being covered but felt more of it should be. LV didn’t accept the outcome. As such, the matter wasn’t resolved and it came to me to decide. I’ve already set out to the parties that I intend to reach a different outcome to that of our Investigator. I said I was minded to require LV to accept some of the damage as covered by the policy. In relation to the different areas of damage, I said: Replacement locks I thought a fair and reasonable position would be for LV to cover this part of the claim. Mr P had shown the keys, which were handed over at the start of the tenancy, and those he received back. I think its most likely the others were lost – they were certainly lost to him – and so I said LV should meet Mr P’s claim for replacement locks, less any applicable policy excess. To the sum it pays, LV will need to add 8% simple interest from the date that the claim was declined, until the date of settlement. Drawing on the walls I said I wasn’t persuaded the damage could reasonably be considered as ‘vandalism’. But I didn’t accept LV’s position that the damage to the walls couldn’t be classed as accidental damage. Accidental damage is defined as “damage caused suddenly by external means which is not expected and not deliberate”. The drawing on the walls is not damage that happens over time, any instance of drawing on a wall is a sudden event. I also didn’t consider the act of a child drawing on a wall to be ‘expected’ or ‘deliberate’. I considered ‘deliberate’ reasonably means something done consciously and intentionally. I didn’t consider, particularly in the context of this tenant’s child, that the damage could be considered to have been done consciously or intentionally. So I said I was satisfied the drawing on the wall does meet the definition of accidental damage set out under the policy.

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I accepted that there have been several instances of this damage throughout the property, but said that does not mean the damage happened gradually, to me it meant there are several claims for the same ‘type’ of accidental damage. Although I didn’t think a fair and reasonable outcome was for LV to charge the excess for each instance of scribbling on the wall. I said that rooms both upstairs and downstairs in the property had been impacted. So I proposed that a fair and reasonable way of resolving this element would be for two excesses to be applied, one for the downstairs, and one for the upstairs. Mr P has provided an invoice for £3,150, the invoice says this is for painting and decorating, tiling the floor and cleaning. The invoice isn’t broken down any further – and Mr P has provided various receipts for paint products purchased. So, I said I’ll require LV to assess the invoices and make a settlement offer for the decoration of the walls that were accidentally damaged. To any sum it agrees to pay it will need to add 8% interest onto the amount from the date the claim was declined, until the date of settlement. Broken window I said I intended to require LV to cover this damage as accidental damage. The window looks to have been smashed by external means. And it seemed most likely to me that this was sudden, unexpected and not deliberate. I said that because whilst its clear the tenant didn’t take good care of the property – with items left dirty – I hadn’t seen anything which persuaded me the tenant had deliberately set out to damage any items. As such I said LV should reimburse what Mr P paid to have the window repaired, less any applicable excess, with interest added from the date the claim was declined, until the date of settlement. Scratches to the flooring I said I was minded to decide that the deep scratches in the hallway should be considered accidental damage because its most likely they were caused accidentally when tenants were removing their furniture from the property. I said, having reviewed the photographs, which were on the first page of the checkout report, I was minded to think Mr P’s explanation of those scratches was persuasive, given they are long and straight in nature, which one would expect if an item of furniture was being moved along the floor. And whilst I accepted there were a few of these, I thought it most likely that the scratches did meet the definition of accidental damage under the policy, in that they would have happened suddenly, as the item (an external means) was moved, and there’s nothing to suggest it was expected or deliberate. As such, I said I intended to require LV to accept these scratches under the accidental damage cover on the policy. I’ve seen an invoice on file for £1,692 for works needed to the floor, however I said I’m aware that as well as the scratches, there was pet urine stains which Mr P said caused damage to the wooden floor. I was satisfied that damage caused by pets is excluded under the policy, as such I couldn’t reasonably require LV to cover that damage as part of the claim. I said whilst Mr P maintains letting a pet urinate on flooring is vandalism, whether it is or not, LV has set out to exclude damage caused by pets. And an insurer is entitled to ultimately decide which risks it wants to insure, and those it doesn’t. As such, I said I intended to direct LV to assess the damage that is covered under the policy and offer settlement, less the applicable excess. To any sum it pays, it will need to add 8% interest from the date the claim was declined, until the date of settlement.

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I said whilst I realised there were other areas of damage, I was satisfied these weren’t covered by the policy. LV responded to say it was disappointed I considered the scratches to be accidental damage. It also said given the extensive staining from the pet urine; it would have to assess if any of the flooring could be covered. Mr P said overall he was ok with the findings. He said in relation to the floor, he couldn’t simply sand one area in isolation as it would create an uneven and patchy surface. But he said he’d accept my findings to bring matters to a close. 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. Neither party provided a substantive response to my provisional findings relating to the locks, the window and the drawing on the walls. As such I see no reason to depart from the findings I set out in relation to those, and those findings are now that of this, my final decision. I realise I’ve directed LV to assess Mr P’s costs. That is because this Service resolves complaints, we don’t assess claims. So if Mr P is unhappy with LV’s offer to settle any of these items, he’d need to complain to LV and allow it an opportunity to respond, before our Service could review matters. But I hope the parties can work together so that isn’t necessary. In relation to the wooden flooring – I accept its complicated by the fact that some areas of the flooring were damaged by pets, which is excluded, and some was damaged accidentally, which is covered under the policy. And I also accept Mr P’s point that he couldn’t simply, in isolation, refurbish small areas of the floor without it likely creating an uneven and patchy finish. Where an area of flooring needs to be repaired, but it can’t be done in isolation to the other flooring in the room, then I think a fair and reasonable starting position is for LV to cover the refurbishment of all of the flooring in that room, to indemnify its policyholder. Particularly when it unfairly declined the claim at the outset. But in this case, some of the damage is excluded under the policy. So I still consider, as I set out provisionally, that LV needs to assess Mr P’s invoice for the flooring and make an offer of settlement for the insured repairs, bearing in mind the principles I’ve set out above. And to any sum it agrees to pay, it will need to add 8% simple interest onto that amount, from the date the claim was declined, until the date of settlement. My final decision My final decision is that I uphold this complaint and I direct Liverpool Victoria Insurance Company Limited to: • Settle Mr P’s claim for replacement locks, less any applicable policy excess. To any amount it pays, it will need to add interest* from the date the claim was declined, until the date of settlement. • Settle Mr P’s claim for a broken window, less any applicable policy excess. To any

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sum it pays, it will need to add interest* from the date the claim was declined, until the date of settlement. • Settle Mr P’s claim for accidental damage to the walls. LV can apply two policy excesses for this damage. To any sum it pays, it will need to add interest* from the date the claim was declined, until the date of settlement. • Settle Mr P’s claim for accidental damage to the flooring, less the applicable policy excess. To any amount it pays, it will need to add 8% simple interest from the date the claim was declined, until the date of settlement. *interest is at a rate of 8% simple per year and paid on the amounts specified and from/to the dates stated. HM Revenue & Customs may require LV to take off tax from this interest. If asked, it must give Mr P a certificate showing how much tax it’s taken off. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr P to accept or reject my decision before 8 April 2026. Michelle Henderson Ombudsman

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