Not upheld: Other regulated complaint complaint against Collingwood Insurance Services (U.K.) Limited

Decision detail

Summary

Miss G and Mr G complained about a £35 cancellation fee applied by Collingwood when their learner driver motor insurance policy was cancelled after Miss G passed her driving test in July 2022. They argued the fee should have been made clearer at the point of purchase, particularly given that most learner drivers would pass their test during the policy period. Collingwood maintained that the cancellation fee was clearly set out in both the policy terms and conditions and their terms of business document, which customers were required to accept before the policy could be issued. The ombudsman upheld Collingwood's position, finding that the policy terms explicitly stated the policy would cease upon passing the driving test and that the £35 cancellation fee was clearly listed in the terms of business document, making it reasonable for customers to have been aware of the charge.

The Ombudsman's reasoning

The ombudsman found that the policy terms and conditions clearly stated the policy would cease when Miss G passed her driving test, and that Miss G and Mr G should notify Collingwood of this event. The terms of business document explicitly listed a £35 non-refundable cancellation fee applicable to any policy cancellation. Since Miss G and Mr G would have been required to accept both documents before the policy could be issued, they should reasonably have been aware of the cancellation fee and its application. The ombudsman interpreted the phrase 'policy will become invalid' in the advertising material as reasonably meaning the policy would be cancelled. Therefore, Collingwood acted within the policy terms in cancelling the policy and applying the fee.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website