My insurance company will not pay for my dry rot claim

Sue1234

Halifax/Lloyds will not cover my costs of £9718 for remedial work to rid my home of dry rot which I found in my property in 2021. I have a Victorian house and dry rot appeared under the wooden suspended floor of my living room. I bought my house in 2014 and had no sign of dry rot before this time.

I made a complaint against Halifax House Insurance (owned by Lloyds) through my insurance policy.

 Dry rot can grow up to 300mm per month. Mycelium grows through the wood, consuming its nutrients and causing it to shrink, crack, and eventually become brittle and crumbly. If left untreated, it can spread to masonry and plaster, threatening a property’s structure, making prompt treatment crucial.

Halifax initial reply:

I’m sorry to let you know the damage to your home isn’t covered under your policy. This is because we believe it to have been caused by damage over time which your insurance policy doesn’t include cover for.

My property is well maintained. An ingress of water which would be covered under my policy has never been found so I still do not know why the dry rot occurred. My property is in a valley, however, so are 50 other properties in the road and of the same age. As far as I know they have not had a dry rot problem.  No visit was made to my property to see that it is well maintained.

I know that John Lewis, underwritten by Royal & Sun Alliance and Churchill Insurance discuss dry rot with the owner and if they don’t pay the complete total they offer a generous percentage of the cost.  Axa insurance have dry rot guidance on their website.

I paid £9691 for treatment without including the work I had carried out trying to find a cause of the problem. To send a professional to make an assessment is a basic requirement. That person would have clearly seen that the property is well maintained. Policy terms allow claims for types of water ingress, so why not dry rot? 

The garden behind my house is on a steep slope. One builder (recommended by the council) carried out work on the rear and side of the house to ensure there were no gaps in the stone walls at ground level where rainwater may have been getting in. He suggested that if there had been a lot of rain previously and the garden above had become sodden, rainwater could have seeped down and under the floor. This has not been considered.

Paying over £17k for work has had a severe impact on my current lifestyle and that of my future. I have been very fair and haven’t asked the insurance company to pay the total amount paid by me even though I can show all the invoices. I have only asked for payment of the remedial treatment.

 

Subsidence is now included in insurance policies with a minimum excess payment. If Lloyds Banking Group thinks that dry rot is not covered, and they respect their customers, they should reconsider this too. I have paid for home insurance all my adult life and can’t remember ever claiming for any incidence on any property I have owned, since a small claim in the great storm of 1987!

 

My Story

I found dry rot in my property in Autumn 2021. I first noticed a smell coming up from under the floor. When I contacted Halifax Insurance they refused to pay for treatment, without sending anyone to investigate.

I bought the property in August 2014 and had not had a problem before. I did much to upgrade the property when I moved in. I have always maintained the property well and in 2018 I upgraded the kitchen which included upgrading drains at the rear etc..

I first talked to a stoneworker who gave his view and carried out some repointing at ground level. Later an experienced builder (recommended by the council) suggested some upgrades that may help. Meanwhile I called in a contractor who was recommended to treat dry rot. They treated the problem, but it returned not long afterwards. I called them back and they proposed a cost of treatment twice a year (at an annual cost of £2000 or a tanking type system at a cost of £20k). I had not had dry rot in any property previously and could have done with some guidance but decided I would not continue with them as they would not guarantee any of their work. I consulted other companies but was concerned that they also would not give a guarantee.

I had asked Rentokil to survey but they said they had no one in my area. One of their experienced staff from a different area suggested I buy Permaguard treatment and spray it myself. For want of any other good advice and to ensure the rot did not spread I sprayed under the floor every month. This wasn’t a solution that rid me of the problem, but it did keep it at bay temporarily.

In Spring 2024 I called Rentokil again who did now have someone in my area. They surveyed and gave me a quote for the work, with a guarantee. This work was carried out in Summer 2024.

After consulting several companies who surveyed, some who made upgrades and others who treated the rot, none were able to give an answer as to why it had begun. I still have never found the cause of the problem.

Rentokil removed a section of the floor and interior plaster both up to one metre. They replaced them and I repainted.  They gave a guarantee, and the problem has not returned.

I don’t see any reason why the cost of treatment of the dry rot should not have been covered by my house insurance. My property is well maintained so it is not negligence on my behalf. The overall maintenance and upgrades I carried out were considered by Rentokil to be good. If they were sub-standard, they would have asked for extra work before they would give their guarantee. Insurance is designed to avoid the stress and high cost that I unfortunately had to endure.

I was stressed for two and a half years after I found it, lying awake at night wondering what I should do, discussing with surveyors, paying money to people who said they knew what they were doing only for the problem to return, clambering down a ladder underneath the floor to spray monthly for over two years. People choose to pay house insurance so that these exceptional circumstances don’t give months of worry and stress and deplete their savings.

The cost of treatment by me to stall the growth, treatment by Cannon Clarke that failed to solve the problem and treatment by Rentokil that finally did resolve it was £9718 inc. vat, which is the amount I want Halifax/ Lloyds to cover.

I can provide all the invoices to show how the money was spent. I can see no reason why Halifax Insurance should not, at the very least, cover this cost, albeit retrospectively.

I fail to see how the house insurance product Lloyds Banking Group offer can be called ‘insurance’.  It should be a service that provides reassurance for a homeowner.

 

MyRealNameToo

Lloyds Bank offer a fairly basic policy, like the majority of policies sold on price they are written on an Insured Peril basis which means for you to have a successful claim you must be able to demonstrate that the damage has been caused by one of the perils, normally things like fire, flood, impact, theft, accidental damage etc. 

Dry Rot is not an insured peril in its own right so if you cannot link it back to an insured peril then it's not covered. 

Direct Line and Axa both offer Insured Perils and All Risk policies depending on your level of policy. All Risk policies are the exact opposite, all losses are covered unless the insurer can point to an explicit exclusion. 

You may want to read https://www.financial-ombudsman.org.uk/decision/DRN5023657.pdf which was a case reviewed by the ombudsman on a policy from UK Insurance (the entity behind Direct Line (and Churchill etc)) on an insured perils policy. 

tacpot12

I think you are going to struggle with this. If the policy wording says that damage over time isn't covered, then this claim is unlikely to succeed, even if you take it to the insurance ombudsman. 

Home insurance was envisaged to cover you against a sudded (insurable) event, like a theft, fire, flood, or ground collapse. I suspect many policyholders are sleeping easy when they should be shopping around for insurance that does come damage over time. I'm not sure that such home insurance exists, but lots of policies exclude damage over time.  

We've just had our own version of this problem at home, where a drain was cracked, and water leaking from it wore away the mortar in the stone foundations. Luckily for us, we had been having blockages in the drains, so had a camera survey that spotted the failed clay pipe. I decide to repair this the pipe myself as our home insurance didn't cover drain failures, and found there was a big void around the clay pipe such that you could see the foundations and also see that most of the mortar was missing in that part of the foundation wall. The home insurance wouldn't over this damage under the escape of water provision because the damage had occured over time. Luckily we found the problem before the foundations started to move. I'm not sure where we would have been if the wall had started to subside. 

dunstonh

Halifax/Lloyds will not cover my costs of £9718 for remedial work to rid my home of dry rot which I found in my property in 2021.

Insurance is not there to cover routine maintenance. 

I know that John Lewis, underwritten by Royal & Sun Alliance and Churchill Insurance discuss dry rot with the owner and if they don’t pay the complete total they offer a generous percentage of the cost.  Axa insurance have dry rot guidance on their website.

You can effectively classify home insurance plans into.  budget, standard, and comprehensive.  Indeed, nowadays you could add an extremely budget tier and an extremely comprehensive tier if you wanted.

If you buy a budget plan, as you have, then you should not expect the coverage of more comprehensive plans. 

I could pay around £400 a year for home insurance, but I instead pay over £3000 a year to give more comprehensive coverage.  That is an extreme difference, but the circa £400 policies wouldn't cover half of what I want covered.   Most consumers don't need the extra I have but you could have chosen a more comprehensive policy than what you bought.

I can provide all the invoices to show how the money was spent. I can see no reason why Halifax Insurance should not, at the very least, cover this cost, albeit retrospectively.

I fail to see how the house insurance product Lloyds Banking Group offer can be called ‘insurance’.  It should be a service that provides reassurance for a homeowner.

If you buy home insurance advised (e.g. a broker), they will ask you a lot of questions to see what type of policy you are after.   They take on responsibility for the research and presenting the solution that fits your requirements.

If you buy home insurance without advice, such as through a comparison site or an off-the-shelf product with no broker involved, then you take on the responsibility for researching and choosing the product. 

Ultimately, if you buy a product that doesn't cover you for something you wanted to be covered for, then it is your responsibility.   And if you buy via comparison sites or direct distribution and pick the ones that come out cheapest, then typically you are looking at the budget or extreme budget end.    

MyRealNameToo

dunstonh said:
If you buy home insurance advised (e.g. a broker), they will ask you a lot of questions to see what type of policy you are after.   They take on responsibility for the research and presenting the solution that fits your requirements.

If you buy home insurance without advice, such as through a comparison site or an off-the-shelf product with no broker involved, then you take on the responsibility for researching and choosing the product. 

Worth noting that the majority of brokers are non-advisory these days so you can't assume they are offering the right product just because they are a broker. A non-advisory broker would get into a lot of trouble if they started recommending products to you. 

Beeblebr0x

This is exactly why I'll be renewing my 90-year-old roof as I believe I won't be insured if the roof were to be damaged in a storm