Home Insurance Payout Too Low

For home insurance, the aim of a settlement is generally to get you back to where you were before the loss or damage. The insurer decides how to settle, for example by repairing, replacing or paying cash, but the Financial Ombudsman Service expects it to consider your circumstances. source

You should first complain formally to the insurer. A business has 8 weeks to consider most complaints. If you have no final response within 8 weeks, or you are unhappy with it, you can refer the complaint to the Financial Ombudsman Service. source

If you complain, the Ombudsman looks at the policy wording in force when the damage happened, whether you were suitably advised, and the law, regulator rules, industry codes and good industry practice at the time. source

The Ombudsman aims to put you back where you would have been without the problem, and may ask the business to compensate you for distress or inconvenience. source

You usually need to complain to the insurer within 6 years of the problem happening, or within 3 years of becoming aware you had cause to complain, or of when you should reasonably have realised. source