Upheld: Motor insurance, claim handling complaint against Hood Travel Limited
Financial Ombudsman decision DRN-5042541 of 2018-10-16T00:00:00+00:00. Motor insurance, claim handling complaint against Hood Travel Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-5042541 |
|---|---|
| Decision date | 2018-10-16T00:00:00+00:00 |
| Firm | Hood Travel Limited |
| Product | Travel insurance |
| Claim type | Motor insurance, claim handling |
| Outcome | Upheld |
| Remedy | Hood Travel Limited must pay: (1) £994.50 being the difference between the flights actually paid for (£2,494.50) and the estimated cost if Mrs B had shopped around (£1,500 for £300 per person), plus simple interest at 8% per year from 17 February 2018 to the date of settlement; and (2) £100 compensation for inconvenience and disappointment if not already paid. |
Summary
Mr and Mrs B missed their return flight due to a traffic accident delay and called Hood Travel for information about insurance cover for alternative transport. Hood Travel incorrectly told them they were covered for up to £500 per person for rearranged transport, and Mrs B booked flights at that cost based on this advice. When Mrs B claimed, the insurer rejected it because they weren't involved in the accident. The ombudsman upheld the complaint, finding that Hood Travel, as an insurance expert with access to the policy terms, should not have given misleading information about coverage. The ombudsman ordered Hood Travel to pay the difference between what Mrs B paid for flights (£2,494.50) and what she likely would have paid if correctly informed (£1,500), plus interest and £100 compensation.
The Ombudsman's reasoning
The ombudsman found that Hood Travel, as an insurance expert, had a responsibility to either tell Mrs B the claim wasn't covered based on the policy terms or to clearly state it couldn't provide guidance about coverage. Instead, Hood Travel gave misleading advice about available cover and what supporting evidence would be needed. Mrs B reasonably relied on this information from the intermediary and booked flights accordingly. The ombudsman applied the standard approach of considering what Mrs B would have done if given correct information, concluding she likely would have taken more time to find cheaper flights (around £300 per person) if she had known she wasn't covered. Mrs B did not fail to mitigate her losses by acting on advice from an insurance intermediary.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Hood Travel Limited, all decisions | 7 | 43% |
| Motor insurance, claim handling, all decisions | 12,798 | 32% |
| Travel insurance, all decisions | 7,644 | 37% |
Source
Read the original decision on the Financial Ombudsman Service website