I have just made a complaint to the Financial Ombudsman Service about Cornhill Direct's Buildings Insurance Policy, and am interested to know if anyone else has experienced similar problems.

Cornhill Direct makes a big deal out of the fact that their policy documents are written in "plain english" and not legal gobbledegook. On the second page of my Buildings Insurance Policy there is a prominent logo showing it has been approved for "Clarity" by the Plain English Campaign, and on page 4 the company reassuringly explains that "To help you throughout this policy we have printed what is not covered in coloured boxes". On the face of it the document does indeed seem a model of clarity, and after reading it and studying the handy coloured boxes you think you know exactly what cover the company is providing.

Recently I suffered a sudden loss of water from my central heating system. Investigation by a plumber has established that there is a leak somewhere under the floor of the Family Room. The pipes that feed the radiators in this room run beneath a sand and cement screed topped with marble tiles, and since there is no dampness showing on the surface, much damage to the floor may occur in the process of finding the exact position of the leak. In fact depending on how much of the floor has to be excavated, the repair cost could run to thousands of pounds.

It is of course to cover the risk of this kind of unforeseen disaster that I spend hundreds of pounds on insurance premiums every year. On receiving the bad news I checked my policy and found that, sure enough, cover is supposedly provided for "damage to buildings caused by...water leaking or overflowing from water tanks, apparatus or pipes or fixed heating installations".

So I approached Cornhill with my claim; only to have it rejected out of hand on the grounds that I was not covered in respect of any work to locate the leak or repair the damage caused by such work. The only compensation the company might provide is for the cost of physically repairing the burst pipe -- something that will take all of about ten minutes once the problem area is exposed and will account for a tiny fraction of the cost!

It appears that the nub of the matter is the meaning of the words "caused by" in the policy document. Cornhill are choosing to apply a limited and legalistic interpretation of the words, whereas everybody with whom I have discussed the policy takes the view that although the excavation and repair of the floor will not have been literally caused by the water bursting from the pipe, this work is only necessary because of the leak, and therefore has effectively been "caused by" the leak. This view is supported by the fact that collateral damage resulting from the repair of a burst pipe is not one of the many items in the coloured boxes which the policy document identifies as not being covered.

It seems to me that Cornhill Direct is trying to have its cake and eat it too. It wants the public to think of it as a consumer-friendly organisation that spells out all its obligations in plain english, yet, when faced with a possible claim it tries to hide behind weaselly lawyers' definitions. In my view, "plain english" that actually misleads is more harmful than gobbledegook.

My complaint to the Financial Ombudsman requests that Cornhill be obliged either to honour my claim, or rewrite its policy documents making the limitations of cover much clearer to potential policy holders. Until the FOS makes an adjudication (it takes months, apparently), Cornhill policyholders and potential policyholders should take heed that they do not have the cover they might expect from reading the policy. Additional cover to protect them from the risk of collateral damage associated with an insured event might therefore be a wise investment. Or better still, perhaps, check out the cover provided by other companies.

Your comments please.

It would appear your policy does not cover 'Trace and Access' which is still very common on household policies.

Query this and ask specifically if your policy covers Trace and Access. If not ask them where in the policy does it state that this cover is excluded and why (if excluded) were you not told of this at inception.

This is a very common misconception, and cause a lot of arguments between Insurers and policyholders.

Unless you have trace and access cover, which is being phased out by a lot of Insurers, you will not be covered.

The rule of thumb is if its wet, its covered. As your floor has not been damaged by an escape of water you will not be covered.

By the way, to add further misery, I would be suprised if the Insurers would cover the damage to the pipe. Your policy should provide cover for accidental damage to underground pipes - Unless you have been doing DIY in the area, it is highly unlikely it has been accidentally damaged, more like corroded

Thanks Xchris and Craigwalton for your input. I'm sure you're correct in saying that Cornhill Direct's position is that the policy does not include "Trace and Access" cover. My point is that the wording of the policy (which is presented as a model of clarity) suggests that it is provided. If as Xchris says this cover is commonly included with Buildings policies, it makes Cornhill's failure to list it as one of the events for which cover is not provided under my policy all the heinous.

Sorry i was saying it is commonly not included in policies.

Not that this will help but the Allianz Cornhill products sold through brokers include trace and access cover as standard up to £5000.

Unfortunately it is common for many Direct Insurers to strip out cover on a policy to keep premiums low and then say come to us as brokers are expensive when the broker is usually providing better cover and all round policies.

Thanks for the update XRChris. I'd like to look at a Cornhill Allianz broker policy to see how it compares with the Cornhill Direct one. Can you suggest how I might get hold of one?

There are several of them but here are links to 2 of them >

http://www.allianzcornhill.co.uk/personal/assets/PDF/ACPER154.pdf See part 16 on page 9 of the policy booklet (adobe acrobat counts it as page 11).

and

http://www.allianzcornhill.co.uk/personal/assets/PDF/ACPER104.pdf This one is section 15 also on page 9 of the policy booklet.

Both clearly show Trace and access cover unlike your policy which does not seem to show it at all.

As a result of my complaint to the Financial Ombudsman, Cornhill Direct have now paid my claim in full. Additionally they have (quite by coincidence of course) decided to include Trace and Access cover in all Buildings Insurance policies when they are renewed.