Leo bought a house in August 2019. Leo contacted the insurance broker (the broker) to request homeowner’s insurance. The broker arranged homeowner’s insurance within forty-eight hours so that Leo could settle his house purchase. When the broker sent Leo his insurance policy documents, they recommended that Leo review and recalculate his sum insured. Sum insured is the maximum amount Leo’s insurer would pay to rebuild Leo’s house if it was damaged or destroyed.
In February 2020, Leo contacted the broker because he had found tenants to rent his house and needed landlord’s insurance urgently. The broker arranged landlord’s insurance for Leo and sent him options for adjusting his excess and premiums. The broker again reminded Leo to review his sum insured.
Leo’s insurance policy was due to renew in July 2020. The broker advised Leo to review his information, including his sum insured, in early July. Leo told the broker that he did not think he had any changes to make. In late July 2020, the broker emailed Leo to confirm that his landlord’s insurance policy had been renewed. The broker recommended that Leo increase the excess on his insurance policy to reduce his premium payments. Leo did not respond.
In July 2021, the broker emailed Leo about his upcoming policy renewal. The broker recommended that Leo review his sum insured. Leo did not respond to the broker. In August 2021, the broker confirmed that Leo’s insurance had been renewed, despite Leo’s lack of response.
In July 2022, the broker emailed Leo to ask for his contact details. The broker had tried to call Leo to discuss his upcoming policy renewal, but Leo’s phone was disconnected. Two weeks later, Leo sent the broker his contact details. The broker responded with Leo’s policy renewal information. The broker told Leo that his sum insured had increased due to inflation and advised him to review and adjust it. The broker had also found quotes from other insurers for Leo to consider. The broker recommended Leo consider a policy with lower premiums and less comprehensive coverage from a different insurer.
Leo did not respond to the broker’s recommendation, so the broker emailed Leo to follow up. Leo told the broker that he planned to sell his house and asked whether he needed to renew his insurance. The broker advised Leo to renew his insurance for six months and cancel it if he sold his house before then. Leo took the broker’s advice.
In January 2023, the broker emailed Leo to remind him that his landlord’s insurance was due to renew in early February. Leo told the broker that his house was no longer for sale and asked the broker for a twelve-month policy renewal quote. The broker sent Leo a policy renewal quote. The quote said that Leo’s premiums were going to increase because of inflation, rising construction costs, and more frequent extreme weather events. The broker advised Leo to review his sum insured.
In early February 2023, Leo said that that he had found a quote for another insurance policy with lower premiums. Leo did not believe that the broker had found him the best deal available. He asked the broker to cancel his landlord’s insurance policy and the broker did so.
Leo complained to FSCL in April 2023.
Leo complained that his broker had not found him the best deal available. Leo thought the broker should have presented him with options for different policies when they arranged his homeowner’s and landlord’s insurance policies. Leo said that the broker did not advise him how to calculate his sum insured when they arranged his homeowner’s and landlord’s insurance. Leo also complained that the broker did not recommend an insurance policy with lower premiums for a couple of years.
The broker said that Leo never requested options for different insurance policies and that Leo had required them to arrange both policies urgently. The broker said that they had advised Leo how to calculate his sum insured when they arranged his policies initially, and each time Leo’s policies were due to renew. The broker said that Leo had never told them he was interested in exploring other insurance policies.
We reviewed Leo’s emails with the broker.
We found that the broker had fulfilled their obligations to Leo, despite Leo’s lack of communication. Leo had asked the broker to arrange his insurance policies urgently. Leo did not ask the broker to provide him with a selection of policies to consider. It was our view that the broker had acted reasonably in the circumstances.
The broker had consistently recommended Leo review and recalculate his sum insured, including when they had arranged Leo’s insurance.
We did not think it was fair and reasonable for Leo to expect the broker to recommend other insurance policies when Leo had never indicated that he was unhappy with his insurance. Despite this, in mid-2022 the broker had recommended Leo consider another policy. Leo ignored the broker’s recommendation. Leo had barely communicated with the broker throughout their relationship.
Our Financial Ombudsman issued a final decision on Leo’s complaint, which recommended that Leo discontinue his complaint. This meant we would not take any further action on Leo’s complaint.
Insights for consumers
Insurance brokers will not be able to find the best insurance policy for your situation if you do not communicate with them. If you are struggling to make your premium payments, you should talk to your insurance broker about other insurance policies or adjusting your excess and premium.
It is important to review and recalculate your sum insured regularly. If your house is damaged or destroyed, your sum insured represents the total your insurer will pay out if your insurance claim is successful. If your sum insured is too low, your insurance policy will not cover the total cost of your repairs or rebuild.