U K Insurance Limited · DRN-6230994

The complaint Mr M complains that U K Insurance Limited (‘UKI’) hasn’t accepted his legal expenses claim. Any reference to UKI includes the actions of its agents. What happened Mr M holds legal expenses cover with UKI as part of his landlord insurance policy. The policy began on 22 February 2024. Mr M rents out a property he owns. The tenancy began in April 2022. In August 2023, the tenants didn’t pay rent because they thought they were owed money for maintenance work carried out on the property. From September 2023, the tenants paid their monthly rent again. On 7 February 2024, Mr M served the tenants with a Section 21 notice. This asked them to leave the property after 15 April 2024. Mr M confirms this notice was served because the tenancy agreement was expiring in April 2024 and he wanted to sell the property. He says this was unrelated to the August 2023 unpaid rent. The tenants refused to vacate the property and then went into rent arrears from 9 May 2024 (though Mr M has mentioned 15 May 2024). Mr M made a claim under the legal expenses section of cover for rent guarantee. Ultimately, UKI said this would only be covered if it accepted a claim under the policy for repossession. Though UKI turned down a claim for repossession as it said the policy excludes claims where the originating cause of action arises within 90 days of the policy starting. It thought the expiry of the Section 21 notice was the originating cause of action in respect of repossession, and this fell within the 90-day timeframe. After Mr M brought complaints to this service about UKI’s claim decisions, we found that UKI was entitled to turn down the claims. In January 2025, Mr M served his tenants with a Section 8 notice. He then made a new claim under the policy. UKI thought this related to the previous claims that had already been declined, so didn’t issue a new claims decision. When Mr M complained, it also didn’t issue a new final response. Mr M therefore brought a complaint to this service. Our investigator looked into things but didn’t recommend the complaint be upheld. She noted UKI had previously relied on the 90-day originating cause of action exclusion in the policy, and she thought the exclusion still applied, despite Mr M serving a Section 8 notice to his tenants more than 90 days after the policy started. Mr M didn’t accept our investigator’s findings and so the matter has been passed to me for a decision. 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.

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Industry rules set out by the regulator (the Financial Conduct Authority) say insurers must not unreasonably reject a claim. I’ve taken these rules, and other industry guidance, into account when deciding what I think is fair and reasonable in the circumstances of Mr M’s complaint. Scope of complaint Although UKI previously turned down Mr M’s claims for rent guarantee and repossession (and this service found it was reasonable for UKI to do so), he has since issued his tenants with a Section 8 notice and considers the expiry of this notice to be a new originating cause of action. Although UKI doesn’t agree, given this was a new development, I think it ought to have considered and addressed this. So, whilst I appreciate there is overlap with the previous claim decisions made by UKI, I’m satisfied it’s reasonable for me to consider the merits of Mr M’s new complaint. Mr M wants UKI to provide legal cover in respect of repossession of the property following the expiry of the Section 8 notice, and to cover his rent arrears since May 2024. A Section 8 notice is a notice of eviction due to a legal reason. I haven’t seen the notice, but I assume it was served due to the non-payment of rent since May 2024. Although UKI hasn’t formally rejected Mr M’s most recent 2025 claim, it says its previous reasons for refusing Mr M’s claim for repossession and rent guarantee apply. So, I’ve considered the complaint on this basis. Repossession claim The policy provides cover for repossession under section J (b) of the legal expenses cover, and says the following: ‘We will pay Costs and Expenses to: 1 obtain possession of the Let Property, provided that, where appropriate, all statutory and contractual notices have been correctly served by You on the tenant…’ This cover would potentially provide the legal support Mr M wants to obtain possession of the property after serving his tenants with a Section 8 notice. However, the following exclusion applies: ‘We will not pay any claim…relating to the following: 1 Unless equivalent legal expenses insurance was continuously in force immediately prior to inception of this Section, any claim where the originating cause of action arises within 90 days of the start of this cover.’ UKI relied on this exclusion when turning down Mr M’s previous claim for repossession following expiry of the Section 21 notice. Even though Mr M has since issued his tenants with a Section 8 notice, UKI thinks the originating cause of action remains the same. I would agree, and I’ll explain why. The wording ‘originating cause of action’ isn’t defined in the policy. When a term isn’t defined, the usual approach of this service is to give words their ordinary everyday meaning. Here, I think the term would mean the initial event that led to Mr M’s claim for repossession. I consider this to be the tenants’ refusal to vacate the property after being asked to do so, regardless of which type of notice was served. I don’t agree with Mr M that the serving of the Section 8 notice was a distinct and new insured event.

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The tenants decided not to vacate the property after 15 April 2024, despite being served with a Section 21 notice that asked them to do so. As the policy was taken out on 22 February 2024 (and Mr M didn’t have equivalent legal expenses insurance before this), I’m satisfied the originating cause of action in respect of repossession was within 90 days of the policy start date. I therefore find that UKI was entitled to rely on this exclusion to turn down the claim for repossession. Rent guarantee claim The policy provides cover for rent guarantee under section K, and this is what it says: ‘We will pay Your Rent Arrears while Your tenant or ex-tenant still occupies the Let Property up to a maximum of 12 months for any one claim.’ This section of cover has the following exclusion: ‘We will not pay any claim under this Insured Incident K relating to the following: … 7 Unless equivalent legal expenses insurance was continuously in force immediately prior to the start of cover under Insured Incident K, any disagreement with Your tenant when the Date of Occurrence is within the first 90 days of the first Period of Insurance and the tenancy agreement started before the start of this Section.’ I think it’s reasonable to say that Mr M and his tenants have a disagreement over the non- payment of rent. The term ‘date of occurrence’ is specifically defined in the policy and the relevant section of that definition says the following: ‘For Insured Incident K Rent Guarantee the Date of Occurrence is the first date that any of the rent due under the terms of the tenancy agreement (or any other amount agreed between You and Your tenant) is not paid, unless this event and any other event leading to a claim have arisen from the same originating cause, in which case the Date of Occurrence will be the first of these events.’ From what Mr M has said, my understanding is that the tenancy agreement had expired in April 2024, so there wasn’t a formal tenancy agreement in place requiring the tenants to pay rent in May 2024. However, given Mr M expected his tenants to pay rent on 9 May 2024 as they remained in the property, I’m satisfied it’s reasonable to say 9 May 2024 was the date of occurrence (though Mr M has also referred to 15 May 2024). As this was within 90 days of the policy starting on 22 February 2024, the above exclusion applies. It could perhaps be argued that the non-payment of rent on 9 May 2024 was an event that arose from Mr M serving his tenants with the Section 21 notice on 7 February 2024. And therefore, the serving of this notice was both the originating cause and the date of occurrence (as this was earlier than 9 May 2024). However, the policy also sets out that for a claim to be paid, the date of occurrence must be within the period of insurance. The Section 21 notice was served on 7 February 2024 which predated the start of the cover on 22 February 2024, and so this wouldn’t be covered. Though in any event, it’s also the case that the claim being payable under the rent guarantee section is dependent on UKI accepting a claim for repossession under section J (b). I’ve already concluded that UKI was entitled to turn down a claim for repossession. I therefore find that UKI was entitled to turn down the claim for rent guarantee.

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Mr M says that when this service looked into his previous complaint about an earlier rent guarantee claim, we found that UKI had applied the 90-day timeframe unfairly. He wants me to take this into account. I note that in that case the investigator was considering UKI’s previous assertion that the tenants first fell into rent arrears in 2023. However, I’ve considered Mr M’s current complaint on the basis that the tenants fell into arrears on 9 or 15 May 2024. My final decision My final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr M to accept or reject my decision before 21 April 2026. Chantelle Hurn-Ryan Ombudsman

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