The Delayed Storm Claim and the Limitation Question
A homeowner, Mr Adeyemi, suffered storm damage to his roof in February 2019. He notified his insurer promptly and an adjuster inspected in March 2019. The insurer made an interim payment of £4,000 for emergency repairs but then went silent. Mr Adeyemi chased repeatedly by phone and letter. In January 2024 the insurer wrote to say the claim was 'still under review' and asked for further documents. In June 2024 Mr Adeyemi issued proceedings. The insurer now argues the claim is statute-barred because more than six years have passed since the damage. The policy is a standard household policy. The total loss is £38,000, of which £4,000 has been paid.
1. Advise on whether the claim is statute-barred, applying limitation principles to insurance claims.
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The starting point is that a claim under a contract of insurance is generally subject to a six-year limitation period (Limitation Act 1980, s.5), running from the date the cause of action accrued.
When did the cause of action accrue? For a indemnity policy, the cause of action generally accrues when the loss occurs (or when the insured's liability is established), not when the insurer admits or delays the claim. On that basis, time would run from February 2019 and expire in February 2025 - so proceedings in June 2024 are within time.
Effect of the interim payment. The £4,000 payment is an admission of liability in part. It does not restart time for the whole claim, but it evidences that the insurer accepted cover. The balance remains a claim for the unpaid indemnity.
Deliberate concealment / estoppel. If the insurer's silence and 'still under review' letters induced Mr Adeyemi not to sue, he may argue estoppel or that time should not run against him during the period of concealment. This is a factual argument, not automatic.
Conclusion: The claim is not statute-barred on the facts - proceedings were issued within six years of the loss. The insurer's limitation defence is likely to fail. The insurer should instead assess the claim on its merits and consider any interest and complaints exposure for delay.
2. Separately, explain how the insurer should handle the complaint about delay and what regulatory/conduct issues arise.
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The delay engages conduct risk and claims handling standards:
- Treating Customers Fairly / Consumer Duty: the insurer must handle the claim promptly and fairly, communicate clearly, and not place unreasonable obstacles in the claimant's path. Four years of silence with periodic 'under review' letters is likely to breach these outcomes.
- Complaints handling: the insurer should log the complaint, investigate, and respond within the eight-week regulatory timeframe, with a final response letter explaining the outcome and the right to refer to the Financial Ombudsman Service.
- Redress: the insurer should consider interest on the delayed payment and any consequential loss caused by the delay, plus an apology and a goodwill payment where appropriate.
- Root cause: the insurer should review why the file stalled - resourcing, handover, or system failure - and remediate to prevent recurrence.
Practical outcome: pay the outstanding £34,000 promptly, add interest, issue a final response, and record the conduct breach for management information.