Two years later, David made a claim after discovering the property had suffered water erosion damage. The bank declined the claim, saying he had a standard house policy, but should have had a commercial policy because he was tenanting the property. Even so, the bank offered him $300 in recognition of its mistake.

Our investigation

David complained to us about the decision and sought reimbursement of his premiums. The bank had indeed put the wrong policy in place, but we didn’t consider David had suffered a financial loss as a result of this mistake because gradual damage (in his case through water erosion) is always a policy exclusion for tenanted properties. In other words, the bank would have declined the claim even if he had a commercial policy.

Outcome

The bank increased its offer to $500, which David accepted.