Tesco Underwriting Limited · DRN-6247627

The complaint Mrs E complained that Tesco Underwriting Limited (“Tesco”) unfairly limited a settlement payment to £5,000, following a trace and access claim, under her home buildings insurance policy. Mrs E is represented in her complaint. But I’ll refer to Mrs E for ease. What happened A leak was suspected originating from the mains water pipe on Mrs E’s property. A contractor was employed to find the leak. This was initially attempted through excavating the kitchen floor. When this was unsuccessful an excavation was dug from the outside of the property. The leak was found and fixed. But Mrs E’s kitchen was damaged. Mrs E contacted Tesco to claim under her policy. She was paid £4,800 as a settlement. This was the policy limit of £5,000 for trace and access costs, less her £200 policy excess fee. Mrs E said the cost of trace and access, and the cost to return her property to its previous state would be more than £14,000. Tesco didn’t increase its settlement. So, Mrs E complained about this, its communication delays, and about a delay in receiving the settlement payment. In its final complaint response Tesco acknowledged a delay in providing updates between 10 and 21 July 2025. It said there was no evidence of water damage beyond that caused by the investigative work. For this reason, it said the claim fell entirely within the scope of its trace and access cover. This meant the policy limit of £5,000 had been correctly applied. It offered £200 compensation for the communication delays. Mrs E didn’t think Tesco had treated her fairly and referred the matter to our service. One of our investigator’s considered the matter, but he didn’t uphold her complaint. He thought the business had dealt with the claim fairly under its policy terms. He agreed that it was fair to pay compensation for the communication delay. But our investigator thought what Tesco had already offered was reasonable. Mrs E didn’t accept our investigator’s findings. She said the policy terms were ambiguous regarding the trace and access conditions. Mrs E maintained that Tesco should pay the full cost of reinstating her property as well as fair compensation. She explained that she is elderly and vulnerable and Tesco’s handling of her claim has caused her distress. As an agreement wasn’t reached the complaint has been passed to me to decide. 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. Having done so I’m not upholding Mrs E’s complaint. I’m very sorry to disappoint her but I’ll explain why I think my decision is fair.

-- 1 of 3 --

Mrs E’s policy terms say: “Trace and access. We will pay the costs you have to pay to find the source of any water or oil escaping from tanks, pipes, appliances, or fixed heating systems that is causing damage to the buildings. This includes the cost of removing and replacing any part of the walls, floors, roof or ceiling.” Mrs E explained that the leak was first suspected when she received contact from her water company. The leak was confirmed to lie somewhere on the mains water pipe under Mrs E’s property. This meant it was her responsibility to fix. However, there was no damage reported due to water escaping from this pipe. The reason it was identified was because Mrs E’s water usage was higher than expected. I’ve read the report from the surveyor Tesco appointed. The surveyor confirmed there was no water damage to Mrs E’s kitchen. This meant the claim fell solely within the trace and access section of her policy. The loss assessor Mrs E employed also described no water damage. This is further supported by the photos provided. So, based on this information there was no cover for trace and access costs under Mrs E’s policy. This is because this cover only applies when a leak is causing damage to the building. There is no evidence that it had caused damage. In its submissions to our service Tesco said that it had “stepped outside” of its policy terms when it settled the claim paying the maximum amount possible for trace and access. It said its decision had benefitted Mrs E as there was no damage caused to the buildings by the escape of water. Tesco makes a valid point. There was no damage to the buildings because of the escape of water. But Mrs E has benefitted by receiving a payment of £4,800 towards her loss when this isn’t covered by her policy. Based on this information I can’t see that Tesco treated Mrs E unfairly. I’ve considered the previous decisions our service has made that were highlighted by Mrs E. The circumstances differ to this claim. Awards were made relating to trace and access costs. But I can’t see that these decisions indicated that policy limits should be disregarded. I understand the reasons why Mrs E referred to these decisions. But, having considered this information I’m not persuaded that Tesco should pay more towards her loss. Mrs E said she provided her bank details on 24 July 2025 for Tesco to pay its settlement. But she said it didn’t pay until 15 August. The final complaint response Tesco sent to Mrs E was dated 23 July 2025. So, the payment delay happened after she received Tesco’s response. The Financial Conduct Authority dispute resolution or DISP rules determine what complaints we can consider. As this issue wasn’t raised as part of this complaint, I can’t consider it here. I’ve thought about Mrs E’s concern with delays in communication from Tesco, and a delay in it providing a written copy of its final complaint response. As discussed, the business has acknowledged its poor communication between 10 and 21 July 2025. I agree that a compensation payment is warranted for this shortfall in the service it provided. Mrs E said she submitted a complaint on 21 July 2025. And that a response was confirmed over the phone on 23 July. But a written response wasn’t provided until 20 August. The final complaint response was dated 23 July. From what I’ve seen this letter should have been sent out earlier.

-- 2 of 3 --

Having considered all of this I think it’s fair that Tesco pays Mrs E compensation. But I’m satisfied that £200 is reasonable to acknowledge the issues described here. It should pay this to Mrs E if it hasn’t already. But I don’t think Tesco treated Mrs E unfairly in the settlement it paid her. So, I can’t reasonably ask it to pay any more. My final decision My final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs E to accept or reject my decision before 21 April 2026. Mike Waldron Ombudsman

-- 3 of 3 --