The bank had closed the account used to pay premiums some time after Zhang had made a big deposit into the account. The deposit covered his payments for a while, but eventually ran out. When subsequent payments fell due and weren't paid, the insurance company cancelled the insurance and the bank closed the account.

Zhang said he was unaware his account had been closed or his insurance cancelled. He said his bank should have told him his insurance had lapsed, and that it was responsible for his house not being covered. He wanted his bank to cancel his home loan or to pay for the house to be rebuilt, and complained to us when it didn’t agree.

Our investigation

We found that the bank had followed the proper process before closing Zhang’s account. It had notified him by mail beforehand and included the reason, which was that the account had been in unarranged overdraft for some time. The bank also said his personal banker had told him at a meeting a month before the fire that he no longer had insurance.

We found that the insurance company had also advised Zhang in writing that his insurance had been cancelled because there was no money in the account for the premiums.

Zhang said he didn’t recall being notified about his closed account or lapsed insurance.

We told Zhang it was his responsibility to ensure he had insurance, and we considered the bank had acted reasonably in the circumstances.

Outcome

Zhang withdrew his complaint.