HCC International Insurance Company Plc · DRN-6234501

The complaint Mr B complains HCC International Insurance Company Plc trading as Tokio Marine HCC has unfairly declined to pay him loss of rent following a claim on his unoccupied residential property insurance policy. What happened I issued a provisional decision. 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 B had an unoccupied residential property insurance policy with HCC. In mid- February 2024 Mr B made a claim against the policy for an escape of water, which HCC accepted. Mr B complains HCC has unfairly declined to pay him loss of rent. The policy provides cover for loss of rent as follows: “14. Loss of rent if the premises become uninhabitable following loss or damage which is covered by an Insured Event (1-11 inclusive only) for: i) the amount of any rent that is due to be paid to you which is lost, and ii) the amount of ground rent payable by you but only in respect of the period necessary to repair the premises” The property wasn’t let when the loss occurred. Mr B has explained that was because he was attempting to sell the property but planned to let the property if the sale didn’t complete by the end of February 2024. He says but for the escape of water, he would have let the property and so he’s lost rent because the property became uninhabitable following the loss. HCC has declined to pay Mr B loss of rent because it says while his intention may have been to let the property if the sale hadn’t completed by the end of February 2024, the sale hadn’t fallen through at the date of loss, and for a valid loss of rent claim there must have been rent due, as per the policy wording. There has been a great deal of analysis of the policy wording by HCC and Mr B. I don’t intend to do the same. In my view the policy intention is if there is a loss covered by the policy and the property is uninhabitable, loss of rent will be paid, if there is a loss of rent. So, the core question is, but for the loss, would Mr B have received rent? I find it’s more likely than not he would. I say this because Mr B has: • shown through contracts and bank statements the property was let previously, and he owns and lets other properties, so letting this property

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wouldn’t have been new or unusual; • been clear his intention was to sell the property ahead of an increase in mortgage payments from March 2024. So March 2024 acted as a deadline for Mr B; • explained – and provided some evidence to support, albeit it from his brother/estate agent – he’d had no success selling the property from July to October 2023 and was contemplating letting the property in October 2023; • shown a prospective buyer (who I’ll call ‘S’) made an offer in October 2023, which stayed any further letting developments; • shown S delayed the sale repeatedly and that by January 2024 his patience was wearing thin, and he was concerned about the financial impact of delays; • provided a letter from an estate agent saying they discussed the situation in January 2024 and if the sale didn’t complete the property would be let; • provided testimony he planned to let the property if the sale didn’t complete by the end of February 2024. I find his testimony consistent and credible; • provided signed statements from his wife, a colleague and a neighbour where they say his intention was to let the property if the sale didn’t complete. While not independent or objective, they tie into the wider narrative; and • shown the sale wouldn’t have completed as S wasn’t in a position to do so, with the latest update saying the funds would be available at the end of April 2024. I can’t know when tenants may have moved in. But the estate agent said demand for properties was high and they were confident they would have found suitable tenants within a short space of time, for £4,000 pcm. So, if Mr B had start marketing the property in March 2024, I find it’s more likely than not he would have had tenants by May 2024. So, I find HCC should pay Mr B loss of rent from 1 May 2024 to when the property became habitable. I’ve considered compensatory interest and compensation in recognition of the distress and inconvenience Mr B has been caused. I’ve decided not to make an award for either. This is because, in brief, I find there was a legitimate and understandable dispute between the parties, which has led to delayed payment(s) and hassle and frustration on the part of Mr B. In these circumstances I don’t find compensation to be appropriate.” Mr B accepted my provisional decision. HCC didn’t provide any further evidence or arguments for me to consider. 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. In the absence of any further evidence or arguments, I see no compelling reason to depart from my provisional decision. It follows I uphold this complaint for the reasons set out in my provisional decision. My final decision I uphold this complaint and require HCC International Insurance Company Plc trading as Tokio Marine HCC to pay Mr B loss of rent from 1 May 2024 to the date the property became (or becomes) habitable.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 15 April 2026. James Langford Ombudsman

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