Not upheld: Home insurance claim disputes complaint against Tradex Insurance Company Limited

Decision detail

Summary

Mr R purchased a taxi insurance policy with Tradex and made a claim following an incident. Tradex discovered the vehicle was subject to a finance agreement between Mr B and a finance company, meaning Mr R did not have insurable interest in the vehicle. Mr R claimed he had purchased the car from Mr B but provided inconsistent information and was unaware of the finance agreement. The ombudsman upheld Tradex's rejection of the claim, finding that Mr R could not demonstrate insurable interest as the finance company retained ownership and there was an outstanding balance owed. The ombudsman also confirmed Tradex was entitled to retain the full year's premium as a claim had been made under the policy.

The Ombudsman's reasoning

A motor insurer provides indemnity only where the policyholder has an insurable interest in the vehicle. Mr R could not demonstrate insurable interest because the finance company owned the vehicle under an agreement with Mr B, not Mr R. Although Mr R was the registered keeper, he was not the registered owner. The finance agreement terms were breached when Mr B sold the car to Mr R without authority to do so. Mr R could only have obtained ownership once the finance was fully paid, which had not occurred at the time of the incident.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website