Liverpool Victoria Insurance Company Limited · DRN-6192622

The complaint Mr L is unhappy with how Liverpool Victoria Insurance Company Limited (“LV”) handled a buildings insurance claim after his home was flooded. Reference to LV includes its agents. What happened Mr L held buildings insurance with LV. In July 2021, his home was badly flooded, causing significant damage to the lower ground floor. Mr L contacted LV to make a claim. LV accepted the claim and appointed contractors to strip out and reinstate the property. Due to high rental costs and the policy’s £50,000 limit for alternative accommodation, LV and Mr L agreed that he and his family would remain at home during repairs. LV installed a temporary kitchen and paid disturbance allowance of £2,000 per month. The strip out was completed but the property didn’t dry as expected. Further investigation found an additional leak and moisture ingress from neighbouring properties. LV decided not to continue drying and instead installed a structural waterproof render and tanking system. This was largely completed, except around windows and doors, as Mr L had accepted a cash settlement for those and intended to upgrade them with flood-resistant replacements. By mid-2022, LV had finalised the scope of works and gone out to tender. In September 2022, LV appointed a contractor I’ll refer to as “Contractor D” to carry out the reinstatement. During the works, disputes arose. Mr L raised concerns about cracks to upstairs walls LV initially said these were unrelated to the flood but later agreed to contribute £750 towards repairs, which Mr L thought wasn’t enough. He also disagreed with LV’s cash settlement amount for the windows, saying they needed to be replaced and not repaired. LV also decided to dry line the walls rather than reinstate with traditional plaster. Mr L suggested magnesium oxide boards as a compromise because of their water resistance. Contractor D installed the boards, but in January 2023 LV told Mr L they were private works and he’d need to pay a shortfall of £9,332.70. Mr L strongly disputed this, saying he hadn’t agreed to pay and hadn’t been told he would be responsible for the cost. By March 2023, LV became concerned about the pace of reinstatement, saying Mr L hadn’t arranged the windows and doors which were preventing the remaining works from moving forward. In May 2023, LV told Mr L that Contractor D had resigned, and LV had decided to cash settle the remaining works. It offered Mr L £74,432, together with £10,000 representing five months of disturbance allowance payments, which had stopped in November 2022. Mr L accepted the £10,000 but not the cash settlement. He said he was shocked and unsure how to proceed. He tried unsuccessfully to find alternative contractors. In August 2023, LV persuaded Contractor D to agree to return, but Mr L refused, saying he’d lost trust and wanted the work re-tendered, which LV didn’t agree to.

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The relationship continued to deteriorate. LV took several months to provide a breakdown of the settlement offer and the scope of remaining works. Mr L raised concerns about the amounts, communication, the quality of existing work, including pipework, and other issues. The stalemate continued into 2024. LV then issued its final response on the matter, maintaining that its decision to cash settle was fair. Mr L referred the complaint to our Service. Our investigator concluded that it should be upheld. He didn’t think it was fair for LG to cash settle the claim while reinstatement was ongoing. He didn’t find persuasive evidence that Mr L had caused meaningful delays and thought LV had caused greater delays earlier in the claim. He also thought LV hadn’t properly warned Mr L that the contractor would resign and the claim would be cash settled, and that it was reasonable for Mr L to refuse Contractor D’s return. The investigator recommended that LV complete the works by re-tendering, review the quality of previous works including the pipework, have the windows reviewed by a qualified professional, repair the upstairs cracks, reimburse certain costs Mr L had incurred, reinstate disturbance allowance and backdate payments to May 2023, and pay Mr L £1,500 in compensation. Mr L accepted these recommendations. LV largely did not. LV agreed to review previous workmanship and Mr L’s invoices and to include the upstairs cracks in the scope of works. However, it strongly objected to re-tendering, highlighting guarantee issues and the risks of appointing a new contractor unfamiliar with the property. LV said it is still willing to arrange for Contractor D to return under certain conditions. It said the decision to cash settle only became necessary due to Mr L’s delay in completing private works and provided correspondence to support this. LV also disagreed with paying additional disturbance allowance. It said the property remained habitable and the £50,000 alternative accommodation limit had been reached. And while it accepted some shortcomings, LV said £500 compensation was fair. Mr L said he couldn’t accept the return of Contractor D or LV’s surveyor due to what happened. He said LV had left him in an extremely vulnerable position. He disputed that he’d caused delays and said the overall timescale was LV’s fault, for example because its first contractor had over-stripped the render and derailed drying efforts. He said the relationship broke down in January 2023 when LV asked him to pay for the boards, and he described LV’s position on disturbance allowance and compensation as cruel and unfair. As the complaint remained unresolved, it came to me to decide. I issued a provisional decision setting out why I intended to reach different conclusions to our investigator. I said: “I’ve summarised the key points and arguments above. This isn’t intended as a discourtesy. I want to reassure the parties that I’ve carefully considered the detailed submissions and evidence they’ve provided. I’ve decided to uphold the complaint to a lesser extent than our investigator. I’ve explained why below, focusing on what I consider most relevant to my decision. If I haven’t commented on a particular point or piece of evidence, it’s not because I haven’t thought about it. Rather, I don’t consider it changes what I see as the fair outcome.

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First, I think it’s important to acknowledge that this has been a deeply stressful and traumatic experience for Mr L and his family. His home was badly damaged and remains in disrepair nearly half a decade later. Both parties hold the other largely responsible for the delay, and while my decision necessarily deals with those arguments, I want Mr L to know he has my sympathy for what happened. LV’s decision to cash settle the claim The main issue I’ve had to decide is whether it was fair and reasonable for LV, in May 2023, to stop managing the reinstatement works and instead offer a cash settlement. This wasn’t a simple claim. By mid-2023, it had been ongoing for nearly two years. Reinstatement was under way and a large proportion of the project had been completed, but a substantial amount of work remained. LV says the decision to cash settle was driven by ongoing delay and uncertainty that it largely holds Mr L responsible for. It says contractor D couldn’t continue without Mr L taking key steps like replacing the doors and windows and selecting a kitchen, and that it wasn’t reasonable to expect the contractor to stay idle for an extended period. LV also says it warned Mr L about delays and increasing costs and urged him to progress matters. I accept that by early 2023 the works had reached a difficult point. Key parts of the schedule were stalled waiting for Mr L to complete items that had been cash settled. I also accept that Contractor D had genuine commercial concerns about continuing to wait for private works to be completed. However, those points don’t in themselves make LV’s decision to cash settle fair and reasonable. The critical issue is not whether LV raised concerns about delay, but whether it made the consequences of continued delay sufficiently clear. In particular, I would expect LV to have clearly and explicitly warned Mr L that reinstatement was at risk of being abandoned, that the contractor might withdraw, and that the claim would be cash settled if matters didn’t progress. LV was the party controlling the reinstatement process. It appointed the contractor, managed the scope of works, and determined how and when the project progressed. Where LV considered that the works couldn’t continue without specific action from Mr L, it needed to manage that impasse clearly and decisively. I haven’t seen persuasive evidence that LV made the consequences of inaction clear in those terms. LV says that by May 2023 it hadn’t heard from Mr L for around three months and the last update was about planning permission for the windows. While LV refers to chasing Mr L in early 2023, I can’t see clear evidence that it escalated matters in a way that impressed upon him that the project was at risk of abandonment. In fact, when the loss adjuster wrote to inform Mr L of the contractor’s withdrawal, his immediate response was to say that he hadn’t heard from the adjuster in several months. LV’s decision also needs to be considered in the context of the claim as a whole. The evidence shows that LV caused significant delays early in the claim, including serious communication issues and delays with the loss adjuster and the initial scope of works. LV’s own records also show that its contractors damaged the property’s tanking system during the strip-out, which severely impacted the drying process. While this doesn’t excuse later delays, it does increase the level of care I’d expect LV to show before such a drastic change of direction.

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Cash settling a claim part way through a complex reinstatement represents a significant shift in risk from the insurer to the policyholder. In a project of this scale and complexity, I’d expect to see clear evidence that LV properly considered and exhausted reasonable alternatives, actively managed the contractor relationship, and made sure Mr L fully understood the implications. For example, this might have included formal escalation in writing with explicit consequences. I’m not satisfied LV met that standard here. Taking all of this into account, I intend to find that it wasn’t fair and reasonable for LV to allow the reinstatement to reach a point where its contractor withdrew, and then to cash settle the claim in the way it did. LV’s decision wasn’t handled with sufficient care, clarity, or regard for the very difficult position Mr L would be left. How to resolve the remaining works With that established (albeit provisionally) I’ve considered what a fair and practical outcome requires to complete the work, and in particular whether it’s fair for Contractor D to return. Our investigator concluded that it was reasonable for Mr L to refuse their return, given the breakdown of trust and the way the claim was handled. I’ve carefully considered that view. However, I don’t reach the same conclusion. I accept the relationship between the parties had deteriorated by the time Contractor D withdrew. I also accept Mr L was frustrated and distressed by the way the matter had been handled – and I’m persuaded that LV dealt particularly poorly with the aftermath of the cash settlement offer. However, I have to consider what outcome is fair and most likely to resolve the matter in its current state. First, I’m not persuaded that there’s enough evidence of poor workmanship by Contractor D that it would be unfair for them to return. Mr L has raised concerns, but I haven’t seen independent expert evidence of critical defects. Some issues raised can be assessed and if necessary, put right as part of completing the works. I also note he was complimentary of Contractor D and their work earlier in the claim. Second, the breakdown in relationship has to be viewed in context. It arose in circumstances where LV failed to properly communicate the commercial pressures Contractor D were under and the consequences of delay. In that sense I don’t think it’s fair to treat the breakdown itself as a compelling reason for them not to return. Third, I don’t consider the dispute over the magnesium oxide boards a persuasive reason, either. The evidence suggests that this arose from a misunderstanding, and poor oversight by LV’s surveyor and loss adjuster, rather than from any deliberate misconduct by Contractor D. They’ve also written off the shortfall and are still willing to complete the work, which I think shows genuine goodwill. Most importantly, I’m not satisfied that re-tendering the works would be a reasonable and practical solution at this stage. The claim has already lasted several years. Re-tendering is likely to cause further delay, disruption and uncertainty for Mr L and his family, with no guarantee that a new contractor would be willing or able to take on the works. There’s a real risk that this would entrench the dispute further rather than resolving it. LV has said it’s willing to arrange for Contractor D to complete the work subject to certain conditions. These are that the remaining works are agreed between Contractor D and LV’s surveyor, that only claim-related works are carried out, that private works and previously cash-settled items are excluded, and that Mr L completes the doors and windows and chooses relevant materials in advance. In relation to the kitchen, LV has said either a like-

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for-like option can be agreed, or the works can be completed to leave the space ready for Mr L to install a new kitchen in his own time. In my view, this is a fair, realistic and proportionate route to bring the claim to a conclusion, as long as the works are properly managed and overseen – which I address below. Taking all of this into account, I intend to find that the fair and reasonable outcome is for LV to arrange reinstatement by Contractor D. If they’re no longer available, only then should LV source an alternative contractor. Safeguards Given the history of the claim, the remaining reinstatement works should be completed with appropriate safeguards in place. As LV will remain responsible for its agents, it must take an active role in managing the completion of the works, rather than leaving Mr L to resolve issues directly with the contractor. This includes making sure the scope of outstanding works is clearly defined, agreed in advance, and limited to insurance works. Before the works resume, LV should provide a clear and up to date scope setting out what remains to be done, how previous works will be treated, and how any concerns about quality will be assessed on completion. Where Mr L has raised concerns about the quality of previous works, these should be reviewed. LV should ensure they’re effective and lasting, and any defects are resolved. LV should also make sure the works are subject to appropriate professional oversight. This includes inspections, certification and sign-off by suitably qualified professionals, and any relevant guarantees and warranties are provided. With these safeguards in place, I’m satisfied that requiring LV to complete the works with Contractor D is a fair and reasonable outcome. A new surveyor Mr L has asked for a new, independent surveyor to oversee the works. I’m not persuaded that appointing a new surveying firm would be fair and reasonable in the circumstances. LV has offered for its surveyor to attend with Contractor D to re-scope and oversee the works. That’s what I would reasonably expect LV to do, given it remains responsible for its agents and contractors. Appointing a new firm at this stage is likely to cause further delay and could reasonably interfere with Contractor D’s return. I recognise the relationship between Mr L and LV’s surveyor has been fraught. But requiring a new firm would risk prolonging rather than resolving the matter. To allow the claim to progress, I’ve addressed the substantive issues that are still in dispute. Magnesium oxide boards I’m satisfied the magnesium oxide boards should form part of the insured works and shouldn’t be considered private works.

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I haven’t seen sufficient evidence that the boards were clearly agreed as private works, or that responsibility for payment was discussed with Mr L beforehand. While Mr L proposed the boards, the evidence shows this was intended as a reasonable compromise within the reinstatement, rather than an upgrade he’d be expected to pay for. In those circumstances, I don’t think it would be fair and reasonable to treat the boards as Mr L’s responsibility. Contractor D has said the material has practical limitations and the walls aren’t perfectly plumb, meaning a perfect finish is likely. While Mr L disputes this, I don’t have independent expert evidence to resolve this point. However, I’d expect the quality of the installation to be reviewed and, where necessary, any snagging or remedial issues to be addressed insofar as the material reasonably allows. Windows LV paid Mr L a cash settlement which included the cost of repairing damaged windows. Mr L says this was unfair because he’s spoken to other companies who have told him the windows can’t be repaired and have to be replaced. He’s said those companies are FENSA- certified, whereas LV’s surveyor is not. LV disagrees and says its chartered surveyor is suitably qualified to determine repair or replacement. I understand Mr L’s concern. However, he hasn’t provided independent expert evidence to show that the windows can’t be repaired. The companies he spoke to also appear to have been approached in the context of upgrading the windows rather than assessing the extent to which they can be repaired. So I can’t fairly place much weight on what he’s been told. I’m satisfied that LV’s chartered building surveyor is suitably qualified to decide the issue, and in the absence of persuasive evidence to show the windows can’t be repaired, I don’t consider it fair and reasonable to require LV to increase its cash settlement. Upstairs cracks LV has agreed to add the cracks to the scope of works. Mr L has said the £750 LV offered hasn’t been paid. So, I’m satisfied it’s fair for LV to include the cracks as agreed. Pipework Mr L says LV’s contractors have installed plastic pipework up against metal fixings and he’s worried about future leaks. I haven’t seen any expert evidence to confirm whether the pipework is unsafe. But I recognise Mr L’s concern. Our investigator recommended LV review the pipework. LV said it had noted those comments. For the avoidance of doubt, given the risk, LV should review the relevant pipework and ensure the works are safe, effective, and lasting. Drying certificate Mr L has asked LV for a drying certificate. LV has explained that it wasn’t possible to return the lower ground floor to normal moisture levels which is why it chose to install a structural waterproof system. I’m satisfied that LV’s position is reasonable. Where a waterproofing system is installed to manage moisture, rather than eliminate it, it wouldn’t be appropriate to issue a certificate. The waterproofing works weren’t finished as the doors and windows hadn’t been installed. Until that’s done, it’s not reasonable to expect a drying certificate to be issued. Once all is

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completed, I’d expect LV to provide the relevant certification and guarantees for the waterproofing system. I don’t plan to require LV to provide a drying certificate at this stage. Planning permission costs Mr L asked LV whether it would contribute towards the cost of planning permission for the windows and doors. He said LV’s scope of works included an allowance for planning costs. LV refused and said planning permission is only required Mr L’s private works. I agree with LV. Permission has arisen from Mr L’s decision to improve his windows and doors. An allowance for planning costs doesn’t apply for private works. I don’t intend to tell LV to contribute. Other associated costs Our investigator recommended LV reimburse Mr L for other costs associated with the contractor’s withdrawal. For example, Mr L has shown the soil pipe wasn’t properly sealed leading to a rat infestation and costs incurred to take care of this. LV agreed that it would review the relevant invoices. I agree that this is fair. LV should reimburse Mr L for any reasonable costs associated with the contractor’s withdrawal, subject to invoices being provided. In line with our published approach, LV should add 8% simple interest per year from the date the costs were incurred to the date of settlement. Technical reports Mr L has asked LV several times for technical reports relating to the claim. LV has previously said it would provide the reports but hasn’t, including under a data subject access request. It isn’t for me to determine LV’s compliance with data protection laws. However, I see no compelling reason why Mr L shouldn’t be provided with reports relating to his property. If LV was willing to cash settle the claim and pass responsibility for repairing the property over to Mr L, then it doesn’t seem reasonable to withhold the relevant reports. Unless LV can give a compelling reason why the reports shouldn’t be disclosed to Mr L, I intend to require their disclosure. LV will be entitled to redact any confidential information. Disturbance allowance Another area where I’ve reached a different conclusion to our investigator is in regard to disturbance allowance payments. This allowance is intended to meet the additional costs a policyholder incurs by remaining in their home, or because of how alternative accommodation has been arranged. While they’re not usually covered by policy terms, they’re generally met by insurers in line with good industry practice, and fall under the alternative accommodation head of cover. LV agreed early on to install a temporary kitchen and pay disturbance allowance so Mr L and his family could remain at home. This benefited all parties. It avoided the need for Mr L and his family to move out and much higher accommodation costs for LV. Even so, disturbance allowance usually needs to be linked to actual additional costs. Mr L hasn’t identified ongoing additional costs at a level that would justify continuous payments of £2,000 per month while works weren’t ongoing. While he’s referred to increased utility costs, LV explained that it paid him £1,500 for this in 2022 and included a further amount in its final

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offer in 2023, in addition to the £10,000 it paid. I haven’t seen evidence that these amounts were insufficient to cover Mr L’s additional costs while the works were stalled. LV has claimed that it stopped paying because the £50,000 limit had been reached. The evidence doesn’t support that. LV’s loss adjuster report from December 2023 states that £43,772 had been paid out under the head of alternative accommodation. I haven’t seen evidence of further payments. So, there appears to be just over £6,000 remaining. With all this in mind, while I know this will be upsetting for Mr L, I don’t think it would be fair to require LV to backdate the payments, particularly given the policy limit. Equally, once the works resume, I see no persuasive reason why the payments shouldn’t resume under the original agreement. So, I intend to tell LV to pay Mr L the previously agreed £2,000 per month from when the insurance-related works resume until they’re completed, or until the £50,000 limit is exhausted, whichever comes first. Compensation I’m satisfied that LV’s handling of this claim has caused Mr L substantial distress and inconvenience over a prolonged period. This was a major household claim involving the loss of use of a significant part of Mr L’s home. While some disruption is inevitable in a claim like this, I wouldn’t expect a policyholder’s home to remain incomplete and compromised several years after the event. In reaching my decision, I’ve considered the overall impact of LV’s actions. In particular, I’ve considered the long delays early in the claim and, critically, LV’s decision to cash settle. That decision left Mr L in a very difficult, uncertain, and distressing position. He was effectively left responsible for managing a large, incomplete, and specialist reinstatement project in circumstances where it wasn’t reasonable to expect him to do so. He was understandably not equipped for this, and I’m persuaded by Mr L’s testimony of the impact this had on his health, family and work life. I also don’t underestimate the impact on Mr L’s day-to-day life. The property remained damp and partially unrepaired for a long time, giving rise to further problems like vermin. The loss of use of the lower ground floor, which formed a significant part of the home’s living space plus the requirement for Mr L to deal personally with the remaining works, would have placed a considerable burden on Mr L alongside his other responsibilities. LV’s communication after the contractor’s withdrawal was also very poor. LV took several months to provide a breakdown of its cash settlement and scope of works, and LV was slow to respond to foreseeable and important questions, about things like handovers, warranties, project management costs, previous works, and the condition of the property. This extended Mr L’s uncertainty and compounded his distress. LV has suggested £500 is fair compensation. I don’t agree. Taking everything into account, I consider the impact on Mr L to have been very serious. I’m satisfied that an award of £1,500 is fair to recognise the substantial distress and inconvenience caused. So, this is what I intend to award.” Responses LV said it accepts my provisional decision.

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Mr L said he couldn’t accept my provisional decision. He provided detailed comment and further evidence that I’ve reviewed carefully and summarised below. Mr L also said he can’t accept the return of LV’s surveyor and Contractor D. He’s highlighted several issues, contradictions, instances of misleading information, and what he views as breaches of professional conduct. He maintains that Contractor D’s poor workmanship, in particular the installation of the magnesium oxide boards, makes it unfair for Contractor D to return. He’s provided information from the manufacturer of the boards and an architect and says this indicates the uneven finish of the boards isn’t unavoidable when the product is installed correctly. He says this supports the view that the issues arose because of poor workmanship from Contractor D. He says this has contributed to his loss of trust and reinforces his belief that the works should be assessed by someone independent. Mr L maintains that LV’s cash settlement for his windows was too low. He’s provided further evidence including quotes and information from window companies and an inspection report to support that view. In relation to disturbance allowance, Mr L says this wasn’t originally linked to specific additional costs or to periods when reinstatement works were taking place. He says LV agreed to pay £2,000 per month to reflect the ongoing disruption from living at home with an uninhabitable floor, and that this disruption has continued regardless of whether works were ongoing. He says the allowance shouldn’t have stopped when the works stopped and also that it shouldn’t be subject to the policy’s alternative accommodation limit. He asks that, if I maintain my decision on this point, whether LV could pay the remaining limit upfront. Mr L said the level of compensation doesn’t reflect the distress, inconvenience, and disruption his family has experienced. He says the situation has had a significant impact on his health, work and family life, and he’s spent substantial time managing the claim and resolving issues that should’ve been handed by LV. He’s provided further evidence relating to his health, reputation, work, and family. He says my intended award doesn’t fairly recognise the scale and duration of impact. He also says his family has experienced a significant loss of amenity for several years, including reduced living space and loss of access to the garden. Regarding the drying certificate, Mr L has asked me to confirm that LV will provide one once the rendering works are finished. Mr L also maintains that LV should contribute towards his planning costs and notes its cash settlement offer included planning costs. Mr L has raised other issues, including that the cash settlement for his doors was too low, that LV hasn’t renewed his policy, that LV needs to pay VAT on certain items, and he’s referred to the Build Back Better scheme and says LV hasn’t acted in accordance with it. Mr L also said my provisional decision contained factual inaccuracies. He said a small section of strip-out remains outstanding; the additional leak early on was caused by LV’s contractors; the render system isn’t finished and cracks have appeared; the walls weren’t intended to be drylined and the magnesium boards only arose because LV didn’t carry out additional works to straighten the walls; Mr L declined LV’s cash settlement because LV didn’t provide a breakdown; and Mr L maintains that the cash settlement decision wasn’t brought about by his delays and the timeline that LV relies on was unrealistic. As both parties have responded, I now consider it appropriate to issue my final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable

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in the circumstances of this complaint. First, I want to thank Mr L for providing further evidence and for the time he’s taken to compile and organise his submissions. I don’t underestimate the time he’s invested and how serious the matter is for him. I’ve only summarised his response and have focused my comments on what I consider to be the key issues based on the evidence and arguments provided. I haven’t commented specifically on every point. This isn’t intended as a discourtesy, rather it reflects the informal nature of our Service and my role within it. In reaching my decision, I’ve considered everything provided. Having done so, I haven’t found reason to change the outcome I reached in my provisional decision. I recognise this will be upsetting for Mr L. I want to reassure him I’ve given careful thought to everything he’s raised, especially the impact the matter has had on him and his family. I’ve explained my reasons below in the context of what I see as the key issues. The return of LV’s surveyor and Contractor D I understand this is the most significant sticking point for Mr L. He’s said he can’t accept the return of LV’s surveyor or Contractor D. While I appreciate his position, I remain of the view that LV’s offer for them to return and complete the works is fair and reasonable in the circumstances. I’ve considered Mr L’s additional comments and acknowledge his desire to have a fresh and independent assessment of the works and a new contractor to finish them. However, I’m not persuaded this would be a fair or effective way to resolve the matter. As I said in my provisional decision, introducing new contractors and surveyors would likely cause significant further delay. A new firm would need to understand a complex and long-running project and there would be practical difficulties around responsibility for the existing works and any warranties – which both sides agree poses a real challenge. There’s also no guarantee that further issues won’t arise down that road. I understand why Mr L sees this as a chance for a fresh start, but I’m still of the view that it would more likely bring further potentially significant delay and complications. I’ve carefully considered Mr L’s detailed concerns about the surveyor and the handling of the claim. These are extensive and I understand why from Mr L’s point of view they’ve led to a loss of trust, especially given the surveyor’s long involvement in the claim. However, the key question for me isn’t whether each of Mr L’s concerns can be individually substantiated, rather it’s whether they demonstrate that it would be unfair for LV to rely on its appointed agents to finish the work. Having considered everything Mr L has provided, I’m not persuaded they do. Mr L has highlighted the dispute over the magnesium boards as a key issue. I’ve considered his further points, including the manufacturer’s comments that the boards should line up when installed correctly, and the architect’s comments that they haven’t been made aware of issues with the boards. But these are general comments about the product rather than a detailed independent assessment of the installation at Mr L’s property. The manufacturer’s comments, while helpful, aren’t entirely independent, and the architect’s don’t address the particular issues Mr L says have arisen here. Against that, Contractor D has said there are practical limitations with the boards due to their rigidity. It remains the case that I don’t have enough persuasive independent expert evidence to say the installation of the boards is critically defective in the sense that they’ve

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been installed incorrectly and can’t reasonably be rectified. Nor have I seen evidence to show the workmanship to date is so fundamentally flawed that it would be unfair for the contractor to continue. I’ve kept in mind that the works aren’t finished. I think that’s important. In a project of this scale, issues can arise and are often addressed through ongoing works and the snagging process. I still find it premature to draw any strong conclusions at this stage, before the works have been completed and any snagging has been carried out. More broadly, and to provide some reassurance to Mr L, LV remains responsible for making sure the property is reinstated with effective and lasting repairs. That includes reviewing the current position, assessing any concerns, and putting right any defects. LV has said the walls will be reviewed as part of progressing the works, and I’m satisfied that’s a reasonable and appropriate step. Mr L has said it wouldn’t be fair for LV to review its own work, especially the walls, because he says the surveyor has already formed an opinion on that. I understand the concern. But I don’t think it follows that a further review by LV or its surveyors would be unfair. A review in this context is part of completing the reinstatement work. I haven’t seen evidence to show the surveyor’s position is so fixed that they wouldn’t be willing or able to reassess the matter. In those circumstances, I’m satisfied it’s reasonable for LV to retain control over how the works are progressed, including which professionals it instructs, provided the end result meets the required standard. If it doesn’t, LV will remain responsible for resolving that. If Mr L finds he’s unhappy with the progress of the works or the standard of repairs, he’d be able to raise that with LV and refer the matter to our Service if unresolved. Taking everything into account, while I recognise Mr L’s concerns and loss of trust, I’m not persuaded the circumstances are such that it would be fair to require LV to appoint a new surveyor or contractor. I’m satisfied LV’s offer for its surveyor and Contractor D to return to complete the works is fair and reasonable in the circumstances. Windows I’ve considered Mr L’s further points and evidence in relation to the window settlement. The key question remains whether LV acted fairly in 2022 when it decided the windows could be repaired and cash settled at £1,200 based on what LV would’ve paid its contractors. LV relied on the opinion of its chartered building surveyor who said the windows could be repaired. The scope of works included easing, adjusting, and rehanging the windows, repairing timber where required, making good, and leaving them ready for decoration. I’m satisfied it was open to LV to rely on that qualified opinion. I’ve considered the further evidence from window companies. Some companies said replacement was the only option or was more economical, but others provided quotes to carry out a repair. That supports the view that repair was a viable option. I also note that much of the evidence is framed around whether repair or replacement is the better option, but I don’t think that’s necessarily the same as whether repair was possible to carry out an effective reinstatement under Mr L’s policy. I accept from a commercial point of view that replacing the windows could be seen as the better option. But that doesn’t mean LV acted unfairly in concluding that repair was enough to return the windows to their pre-loss condition, which is what LV had to do.

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I’ve considered the inspection report. I accept it concludes the windows aren’t worth the time and cost to repair, and replacement would be the better long-term option. But it doesn’t conclude that repair isn’t possible. The report also identifies decaying timber and says this is likely to progress. If it’s likely to progress now, it follows that it has likely progressed prior to the inspection. This makes it difficult to apply the report’s conclusions to the position in 2022 when LV’s surveyor made his assessment. The report also notes ongoing maintenance issues like paint build-up and repeated sealant work. It explained how those issues contribute to moisture retention and speed up timber decay. Given the passage of time, I don’t find the report more persuasive than the surveyor’s assessment at the time. Regarding the amount, LV was only required to pay what it would’ve cost its contractor to carry out the repair. Mr L’s quotes are generally for more extensive works or replacement, mostly from several years later, and mostly don’t provide a like-for-like comparison – for example, many of the quotes include modern double-glazed hardwood units with modern draft proofing, whereas Mr L’s original windows are single-glazed softwood units. The quotes indicate repair was achievable for in the region of £2,550 to £2,850. Taking into account preferential contractor rates that LV would likely have access to, along with the scope and timing in 2022, I’m not persuaded £1,200 was clearly insufficient for the repair that LV intended its contractor to do. Mr L has pointed out that those lower prices don’t include decoration, which is very expensive. I accept that. But the entry on LV’s scope of works for repairing the windows didn’t include decoration. Decoration and woodwork appear to have been included separately. As LV hasn’t cash settled for those works, it remains liable for them. But I can’t say it was unfair for LV not to have cash settled for those additional costs in 2022. I’ve considered Mr L’s comments about FENSA certification. But the absence of FENSA certification for repair works doesn’t mean repair wasn’t an appropriate method of reinstatement and an option open to LV. Taking everything into account, I remain of the view that LV acted fairly in 2022 in concluding the windows could be repaired and cash settling for £1,200 based on the cost it would’ve paid its contractor. Mr L has asked whether he could return the £1,200 to LV and have its contractors carry out the repairs on a like-for-like basis instead. This request falls outside the scope of the complaint I’m deciding here, which concerns whether LV acted fairly up until its final response in September 2024. I’d encourage Mr L to discuss the request with LV, and I’d expect LV to consider it fairly. If Mr L is unhappy with LV’s response, he could raise a new complaint. Disturbance allowance I’ve carefully considered what Mr L has said about disturbance allowance, including his view that it wasn’t linked to actual additional costs and should continue regardless of works. I remain of the view that I reached provisionally. In general, I’d expect disturbance allowance to be linked to actual additional costs incurred as a result of the claim. I haven’t seen evidence that Mr L has incurred costs approaching the level of payments LV has made, which are significant. I’m satisfied LV has already paid considerably more than would ordinarily be expected on that basis.

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I accept that, in this case, the allowance appears to have been used more broadly as a pragmatic arrangement at the start of the claim. But that doesn’t mean it should be treated as an open-ended payment for general disruption. If it were viewed that way, the level of payments would in any event far exceed what our Service would typically award for distress, inconvenience, or loss of amenity. I understand Mr L’s point that his home has been disrupted throughout, and if he’d moved into alternative accommodation the policy limit would’ve likely been exhausted sooner. But I have to consider what happened – and in this case he didn’t move out, so I don’t find that comparison persuasive in determining what’s fair here. In the circumstances, I remain satisfied it’s reasonable for the disturbance allowance to be linked to the progression of works, rather than continuing indefinitely regardless of works. Mr L has asked me to require LV to pay the remaining allowance upfront. I don’t think it would be fair for me to require LV to do that. I’m satisfied the remaining allowance should be considered in the context of ongoing works when they start again. The timing and length of those works isn’t clear and depends on Mr L completing his intended upgrades. Even so, it would be open to Mr L to discuss the position with LV given his works need to happen first. Compensation I’ve carefully considered what Mr L has said about compensation, including the further evidence he’s provided about the impact on his health, work, and family life, and the loss of amenity he and his family have experienced over several years. I don’t underestimate the seriousness of what he’s described. This has clearly been a prolonged and profoundly difficult situation for Mr L and his family. I accept that he’s had to deal with significant and ongoing disruption to his home, including the loss of use of a substantial part of it, and that he had to take on managing the claim that wouldn’t normally be expected, causing significant stress and worry. I’ve also taken into account the evidence relating to Mr L’s health and the wider impact on his personal and professional life. However, I hope he can appreciate it’s difficult for me to draw a direct causal link between those health issues and the specific actions on LV’s part that I’ve found to be unfair, rather than the broader stress of the situation. But I do accept LV’s handling would have contributed to that stress and made matters a lot worse. As I explained in my provisional decision, the most significant failing here was LV’s decision to cash settle when it did. That left Mr L in a very difficult and uncertain position, effectively responsible for finishing a complex project in circumstances where it wasn’t reasonable to expect him to do so. Alongside that, there were earlier delays in the claim and poor communication following the contractor’s withdrawal, which prolonged the situation and added to the distress. Taking everything into account, I remain satisfied that the impact on Mr L has been serious and sustained. But I also have to ensure that any award is fair and balanced, and consistent with what our Service would typically award in similar circumstances. Having done so, I remain satisfied that £1,500 is fair and reasonable to recognise the distress and inconvenience caused by LV’s mistakes. Drying certificate

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Mr L has asked for confirmation that a drying certificate will be provided once the rendering works are completed. I explained in my provisional decision why I was satisfied LV’s position here was reasonable. I haven’t seen anything in Mr L’s response that leads me to reach a different conclusion. At this stage, I don’t think it would be appropriate to direct LV to provide a specific drying certificate once the rendering works are completed. Whether a drying certificate is issued will depend on the professional opinion of those carrying out the works. What I would expect, once the rendering works are finished, is for LV to ensure the appropriate certification and guarantees relating to the waterproofing system are provided. Planning permission Mr L says LV should contribute to the cost of planning permission for the windows and doors. He says LV included costs for this in its cash settlement offer. I’ve already established that LV’s decision to cash settle was unfair. Whether or not planning costs were included in that offer, I remain of the view that it wouldn’t be fair to require LV to pay for something that’s not a direct requirement of reinstating the insured damage. I recognise planning permission has been difficult and complex for Mr L to navigate. But the need for it arose from Mr L’s decision to upgrade his property. I understand why he wants to do that, but the associated costs are not LV’s to pay. VAT Mr L has said LV owes him VAT and has highlighted a door survey invoice. He says the survey was necessary and LV cash settled for the doors so it should pay VAT on the survey. LV declined, saying the survey wasn’t part of the insured works. Where an insurer cash settles for reinstatement works, it’s standard industry practice for VAT to be excluded until the policyholder provides evidence to confirm that VAT has actually been incurred in having the relevant works carried out. The survey in question was carried out by a flood-proof door company. It appears to have been obtained as part of Mr L’s decision to upgrade his doors, rather than to reinstate them as they were before. LV’s responsibility was limited to the cost of reinstating the doors to their pre-loss condition. I haven’t seen evidence that such a survey would have been required if the doors had simply been repaired or replaced like for like. In those circumstances, I don’t think it was unfair for LV to refuse to reimburse VAT on the survey. However, I would expect LV to reimburse VAT once Mr L provides invoices for the replacement doors showing VAT has been incurred. LV’s liability would be limited to the VAT payable on the cash settlement amount it paid for the doors. Door settlement Mr L has obtained quotes to replace his doors that LV cash settled. The quotes have caused him to question whether LV’s cash settlement amount was fair. I can’t see that this formed part of the complaint Mr L made to LV or referred to our Service. So, this particular point isn’t within the scope of my decision here. Mr L would need to raise this to LV first as a new complaint and refer it to our Service if it remains unresolved.

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Build Back Better scheme Mr L has asked whether LV should have accounted for the Build Back Better scheme which, in certain circumstances, reimburses up to £10,000 for flood mitigation works. LV said the scheme launched in 2022 and only applies to losses after that. I haven’t seen anything to indicate that’s not the case, so I don’t think LV’s response was unreasonable. Renewal Mr L has said LV hasn’t renewed his policy which has left his family vulnerable. The scope of my decision covers LV’s handling up until its final response in September 2024. I understand from Mr L that LV didn’t invite him to renew in 2025. I’m not able to consider that in my decision here. He’d need to raise this with LV before we could consider it. Inaccuracies in the provisional decision I’ve considered Mr L’s comments about inaccuracies in my provisional decision. I accept that a small part of the strip-out works hasn’t been completed. But I’m satisfied this was a minor outstanding item that forms part of the ongoing reinstatement works and doesn’t materially affect my findings. Mr L has also raised concerns about the render system. I’m aware that this work remain unfinished and cracks have developed. In the circumstances, I’d expect those issues to be assessed and, where necessary, put right as part of completing the work and ensuring an effective and lasting repair. In relation to the additional leak early in the claim, I’ve already considered that there were problems and delays in the early stages when considering compensation. But this doesn’t change my conclusions about how the claim should now be progressed, particularly given the current contractor is different. I’ve considered Mr L’s comments about the walls, but as I explained above I haven’t seen enough persuasive independent evidence to conclude the current approach is fundamentally wrong or critically defective. Given the works aren’t finished, I’m satisfied this is something that can be reviewed and addressed if necessary. Mr L has also reiterated his concerns about LV’s decision to cash settle and the circumstances in which that decision arose and what followed. I’ve already addressed this in my provisional decision and remain satisfied that cash settlement was unfair. Taking everything into account, while I’ve noted the points Mr L has raised, they don’t change my overall findings or the outcome of the complaint. Conclusion I’ve reviewed the complaint again and my opinion hasn’t changed. So, my provisional decision, along with my additional comments here, now form the basis of this, my final decision. Putting things right To resolve the matter, I direct LV to:

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• Arrange for the remaining insured reinstatement works at Mr L’s property to be completed, restoring the property to its pre-loss condition as far as reasonably possible, subject to the findings set out in this decision – once Mr L has completed the private works necessary for reinstatement to continue. • Arrange for Contractor D to complete the works. If Contractor D is no longer available or willing, LV must appoint a suitable alternative contractor to complete the works without unreasonable delay. • Resume payment of disturbance allowance of £2,000 per month from the point the reinstatement works resume. Continue those payments until the works are complete or the policy limit for alternative accommodation is exhausted, whichever comes first. • Provide Mr L with the relevant technical reports relating to his property. • Reimburse Mr L for any reasonable costs associated with the contractor’s withdrawal in 2023, subject to invoices being provided. In line with our published approach, LV must add 8% simple interest per year to any refund amount, from the date costs were incurred to the date of settlement.* • Pay Mr L £1,500 of compensation for distress and inconvenience. *If LV considers that it’s required by HM Revenue & Customs to deduct income tax from that interest, it should tell Mr L how much it’s taken off. It should also give Mr L a tax deduction certificate if he asks for one, so he can reclaim the tax from HM Revenue & Customs if appropriate. My final decision For the reasons I’ve given, I uphold Mr L’s complaint and direct Liverpool Victoria Insurance Company Limited to do as I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr L to accept or reject my decision before 23 April 2026. Chris Woolaway Ombudsman

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