Not upheld: Service failures generally complaint against Collingwood Insurance Services (U.K.) Limited

Decision detail

Summary

Mr H complained that Collingwood Insurance Services charged him a £40 cancellation fee when he cancelled his learner driver motor insurance policy after eight months, following his passing his driving test. He argued the cancellation fee was unfair and that the terms were not clearly communicated at the point of sale. Collingwood maintained the fee was clearly stated in its terms of business and was fairly applied in accordance with the policy terms. The ombudsman did not uphold the complaint, finding that cancellation charges are commonplace in the insurance industry, the fee was clearly communicated, and Mr H could have reviewed the terms before purchase given the nature of learner driver insurance.

The Ombudsman's reasoning

The ombudsman found that cancellation charges are commonplace in the insurance industry and are not inherently unfair provided they are clearly communicated. Collingwood made the £40 fee transparent in its terms of business, which Mr H could have reviewed before purchase. Given the nature of learner driver insurance, Mr H should have been aware he might not need the cover for the full term and could have checked the cancellation terms accordingly. The ombudsman noted that mid-term cancellation fees are standard practice and Mr H would have found it difficult to find alternative cover without such a fee.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website