Protector Insurance UK · DRN-6224215

The complaint Mr A complains that Protector Insurance UK have declined his claim for damage to his property under a policy exclusion. He’s also unhappy with the amount they’ve offered him to make good stripping out work completed by Protector’s contractors before his claim was declined. What happened Where I’ve referred to Protector this includes any actions and communications by agents appointed by Protector to act on their behalf. Mr A is a leaseholder of a property, and he’s a beneficiary under the freeholder’s building insurance policy underwritten by Protector. Mr A complains about Protector’s handling of a claim for damage to his leasehold property. In September 2024 Mr A noticed water ingress into his flat from the balcony above his property. This was reported to the Council who own and manage the block of flats. Water was found to be overflowing from the balcony above, and there was thought to be an issue with rainwater drainage. Mr A was advised that the drainage issue had been cleared in November 2024 and he submitted a claim to Protector for damage to his property. Protector instructed loss adjusters who visited Mr A’s property on 22 April 2025. Prior to the loss adjusters involvement contractors had been instructed by Protector and they’d carried out stripping out work inside Mr A’s flat. After the loss adjustor’s visit to the property Protector declined Mr A’s claim on 9 May 2025. He was told that the damage to his property wasn’t the result of a sudden one-off fortuitous event which would have been covered by his policy. It was the result of an ongoing latent defect with the block’s balcony drainage and rising damp in lower levels of the property. While on site the loss adjuster was advised that water was still overflowing from the balcony above Mr A’s property and there had been constant, ongoing issues with this. So Protector said the water ingress was caused by a latent defect with the balcony drainage. In addition they said that test results on the lower walls showed positive readings for ground salts which indicated the presence of rising damp. And they said that cover for rising damp also fell under the exclusions to his policy. So Protector declined Mr A’s claim but said they've cover the cost of reinstating his living room where stripping out works had been carried out. Mr A was offered £2,355.74 excluding VAT to cover the reinstatement costs. Mr A wasn’t happy with his claim being declined and raised a complaint. He said that the balcony above continued to overflow after he’d been told it was repaired in November 2024. And he believed this indicated a failure of the repairs, or a new issue. So this wasn’t covered by the policy exclusion in respect of latent defects or gradual deterioration.

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In respect of Protector’s settlement offer he said the £2,355.74 offered to reinstate his living room fell significantly short of what this would cost. He estimated that basic reinstatement would cost between £6,000 and £8,000. So he wanted Protector to carry out a proper reassessment of the actual reinstatement costs. Protector issued a final response to Mr A’s complaint on 26 June 2025. In respect of the drainage issue they said that when their loss adjuster visited the property in April 2025 they were told the water still wasn’t draining through the pipework below the balcony which indicated a longstanding ongoing inherent and latent defect, rather than a new issue. And the Council who own the block of flats had allowed water to overflow and ingress into Mr A’s flat for over nine months without taking reasonable and timely action to address the issue. While the initial report of damage in September 2024 might be classified as a sudden and fortuitous incident, the longstanding and ongoing nature of the damage, for which an exact cause had not been identified goes completely against the definition of a one-off incident. And they maintained that as there was evidence to support the damage was caused by a longstanding issue, the policy exclusions applied. In respect of the reinstatement of the strip out work done in Mr A’s living room Protector said they were only responsible for returning his living room to the pre-strip out condition. Which would involve reinstating the flooring and skirting, renewing the plaster and redecoration. They said the £2,355.74 offered was calculated using a scheduling tool which uses the National Schedule of Rates (NSR) which are comprehensive and include materials and labour. They said the figures Mr A had suggested appeared unsubstantiated and varied hugely from NSR rates. But they said they were prepared to agree a 10% market rate uplift to £2,591,31 excluding VAT. Unhappy with the decline of his claim and the reinstatement offer Mr A complained to our service. Despite a number of requests and extensions of time being agreed with Protector they’ve failed to provide their business file. So when our investigator considered the complaint he only had available to him the information Mr A was able to provide. As Protector hadn’t provided any evidence our investigator said he was unable to say whether they’d applied the exclusions they’d relied on in declining Mr A’s claim fairly and reasonably. So he recommended they reconsider his claim in line with the remaining policy terms and conditions. In respect of the £2,355.74 they’ve offered Mr A to return his property to the pre- strip out condition our investigator said Protector hadn’t provided any evidence to support how this figure has been calculated. So he wasn’t persuaded that this offer was sufficient and recommended that reassess their cash settlement offer. In addition he said Protector should pay Mr A £350 for the distress and inconvenience he’d experienced as a result of the decline of his claim and the insufficient cash settlement offer. Protector failed to respond to our investigator’s view so the case has come to me for a decision. I issued a provisional decision on 24 February 2026. And in it I said: - I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Mr A believes the damage to his property should be covered by Protector as it’s due to an

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escape of water. In their final response letter Protector said the policy excludes cover for damage arising from gradual deterioration or latent defects. And that the ongoing nature of the problem with water overflowing from the balcony above his flat indicates that there is a latent defect in the drainage system, which the Council as freeholders of the block of flats, have a responsibility to repair but have failed to do so. While this may be correct Protector have failed to provide any evidence that there’s an ongoing problem with the flats drainage system. Or that there’s an issue with rising damp. So they haven’t shown that policy exclusions apply to Mr A’s claim. There’s been an escape of water and in the absence of evidence that exclusions have been applied fairly and reasonably, I’m persuaded that Protector should reconsider Mr A’s claim in line with the remaining terms and conditions of his policy. Protector arranged for contractors to strip out Mr A’s living room before his claim was declined. So they need to cover the cost of him putting his property back into the pre-strip out condition. Although they’ve said that the figure they’ve offered was calculated using NSR Protector haven’t provided any details of these rates or what work was included in their calculation. Mr A told them that the sum they’ve offered is insufficient to cover the work that’s required and has said he believes £6,000 to £8,000 is a more realistic figure. In the absence of any evidence from them supporting their calculation, that it’s fair and reasonable and that it covers the cost of the required work. I think Protector should cover the cost of this work based on what Mr A says it’s going to cost him. So Mr A should obtain three estimates for the reinstatement work and Protector should provide a cash settlement based on the average cost of these. Protector haven’t dealt with Mr A’s claim as I’d have expected them to. Initially they were dealing with the claim and instructed contractors to start work on his property. They then instructed loss adjusters and declined the claim based on their investigation. They’ve not acknowledged that they got things wrong or offered Mr A any compensation for the distress and inconvenience their handling of his claim has caused him. Taking everything into account I think Mr A is entitled to compensation and I believe £350 is the correct amount. So my provisional decision was that I upheld Mr A’s complaint. In response to my provisional decision Protector have provided their business file. This includes their loss adjuster’s report, photographs of the internal damage to Mr A’s property, photographs of the balcony above his flat and the defective drainage system, and details of the tests carried out at Mr A’s property in relation to damp and possible asbestos. It also provides details of the strip out work carried out in Mr A’s living room before the loss adjusters were instructed, together with photographs of the room after the strip out. The loss adjuster’s report is dated 2 May 2025. It confirms that when Mr A was advised that the problem with the drainage on the balcony had been resolved, Protector instructed contractors to carry out a damp assessment and as part of this a strip out of his living room was approved to assist drying. Following positive salts tests on the damp the contractors advised Protector that rising damp was present Mr A’s property. When the loss adjuster’s visited the property Mr A showed them the balcony the water was coming from and that it was still overflowing. The photographs of the balcony show evidence of water damage and the loss adjusters concluded that there appeared to be a latent defect with inadequate balcony drainage, causing longstanding and ongoing damp issues at the top of the wall. And the lower wall was affected by rising damp within the property.

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The loss adjusters advised Protector that the damage Mr A was claiming for had been caused over time and so wasn’t covered by his policy. But they said Protector would need to provide Mr A with a cash settlement to enable him to reinstate his living room to its pre-strip out condition. They provided Protector with a schedule of works, dated 9 May 2025, for the reinstatement works they say are required to Mr A’s property. The costs of the work is £2,355.74 with VAT of £471.15, a total of £2,826.89. The work included in the schedule is supplying and fixing new laminate flooring, plaster skimming the walls, painting the walls and supplying, fixing and painting new skirting. The schedule breaks down the work required and provides a rate for each type of work and the number of units required. But there are no details of how these rates have been calculated. 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. Mr A’s policy provides cover for damage caused by escapes of water. But the policy has general exclusions for damage caused by “gradual deterioration”, “wear and tear” and “latent defects.” Having considered the loss adjuster’s report I’m satisfied that the escape of water from the balcony above his was an ongoing, long-term issue due to a defect in the drainage system, rather than a one off incident. As such cover under his policy is excluded as it doesn’t cover damage arising from “latent defects.” Mr A has suggested that the Council as freeholders of the flats repaired the fault with the balcony drainage in September 2024, and this repair then failed, causing the damage to his property. And it was the failure of this repair that caused the damage, so it should be covered by his policy. The photographs of the damage taken both inside Mr A’s property and externally of the balcony clearly show the extent of the damage. And considering these, together with Mr A’s account to the loss adjuster of the overflowing water being an “ongoing issue”, I’m persuaded that the extent of the damage is such, that it’s damage that has been caused over time due to a latent defect with the drainage system, rather than damage caused by a failed repair. The result of salts tests carried out on the damp on the lower walls were positive indicating the presence of rising damp. This is a problem which develops over time and wouldn’t be covered as the policy excludes damage arising from “gradual deterioration.” So I’m satisfied that Protector declined Mr A’s claim fairly and reasonably and in line with the terms and conditions of his policy. Protector have offered Mr A a cash settlement to return his living room to its pre-strip out condition. They’ve now provided a copy of the schedule of works providing a breakdown of the work their cash settlement offer covers. But although they’ve said the offer was calculated using NSR rates they’ve not provided any evidence of these rates or to show that it’s reasonable to use them. As I’ve not seen evidence to confirm that Protector’s cash settlement offer is fair my opinion

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remains that they should settle the cost of reinstatement of Mr A’s living room on the basis of the average of three estimates he obtains for the work. Such estimates should cover the reinstatement costs only and not the cost of repairing the damage caused by the overflowing water from the balcony and the rising damp. Protector’s cash settlement offer was made net of VAT. But if Mr A is required to pay VAT on the materials and work he has carried out then Protector should pay or refund the VAT on receipt of the appropriate VAT invoices. My opinion about how Protector have dealt with Mr A’s claim hasn’t changed so I require them to pay him £350 for the distress and inconvenience this has caused him. Putting things right To put things right I require Protector to do the following: - • To cash settle the cost of reinstatement of Mr A’s living room to its pre-strip out condition on the basis of the average of three estimates he obtains. • To pay or refund VAT on work and materials on receipt of appropriate VAT invoices. • Pay Mr A £350 for the distress and inconvenience he’s experienced as a result of their handling of his claim. My final decision For the reasons set out above my final decision is that I partially uphold Mr A’s complaint about Protector Insurance Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr A to accept or reject my decision before 17 April 2026. Patricia O'Leary Ombudsman

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