Understanding the motor insurance complaints


Staff member
I'm not one for reading Financial Ombudsman Services news letter but a copy was left on my desk with an artical on motor insurance open and it makes for quite interesting reading.

Aside from PPI, the financial ombudsman sees more complaints about car and motorcycle insurance than any other type of insurance. And cases involving theft or attempted theft make up a large part of these.

According to police figures, car thefts in the UK have fallen considerably – from 378,000 in 1997 to 90,000 in 2013. But over the past few years, the number of contested claims reaching financial ombudsman has been relatively steady.

The financial ombudsman says that, around four in every ten cases that a claim has been wrongly rejected.

If someone feels that their theft claim has been unfairly turned down, the financial ombudsman look at the exclusion the insurer is relying on – and whether the insurer has shown it applies. They also consider whether the exclusion was drawn to the consumer’s attention.

Nearly all motor insurance policies exclude cover for theft if the keys were left in or on the vehicle, or if the vehicle was left unlocked and unattended. But in many cases what “unattended” means is often called into question.

When making their decisions, they take into account the Court of Appeal’s judgment in Hayward v Norwich Union. So they might decide that a car was “attended” even if the driver wasn’t in it – as long as they were close enough that their presence would be likely to deter a thief.

And they might say it isn’t reasonable to apply an exclusion in exceptional circumstances – for example, an emergency – where leaving their car unattended isn’t the driver’s most pressing concern.

An insurer might tell the financial ombudsman that their customer has been “reckless” – that is, they knew there was a risk their vehicle could be stolen, but they didn’t take sufficient steps to protect it. But this can be difficult to show. And in many cases, while they might agree someone’s been careless, they don’t agree they were “reckless”. In these cases, we tell the insurer to pay the claim.

You can read more and some interesting examples of real cases on the link below.