The Banking Ombudsman has rejected a complaint that a bank was responsible for not providing adequate insurance cover.

The complainant purchased properties with a loan from the bank, who also provided her with insurance. A year later, the complainant noticed that one of her properties had been damaged by a tenant’s animals, and there was gradual water damage.

The complainant made an insurance claim to the bank, but it was rejected because her policy did not cover animal or gradual damage. The complainant argued that it was the bank’s responsibility to provide insurance that met her needs, and that they had delayed the process and forced her to accept inadequate insurance.

The bank denied these arguments and rejected the complainant’s insurance claim. The complainant then applied to the Ombudsman, seeking an investigation. The Ombudsman’s investigation found that the bank was justified in denying the claim.

Insurance providers such as banks have a duty to act with care, diligence and skill, which means ensuring that insurance policies meet a customer’s needs. In this case, the investigation found that the complainant had told the bank that she needed “rental cover”.

The Ombudsman decided that the bank should have informed the complainant about optional benefits to landlords, and had failed to do so. However, the Ombudsman decided that even if the bank had done this, the complainant still would not have been covered for animal and gradual damage.

The investigation failed to find anything which suggested the complainant had been pressured into signing, and actually found that the complainant had obtained a quote from another insurance company. The complainant also had every opportunity to review her policy once it was settled.

The Ombudsman rejected the complainant’s claim and she was left empty-handed. This case shows the importance of knowing exactly what is covered by your insurance policy. If you are confused about your policy, it pays to seek advice from a professional with experience in the area.


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