Upheld: Travel / life insurance claim disputes complaint against Bastion Insurance Company Limited

Decision detail

Summary

Miss B purchased mobile phone insurance from Bastion in April 2023 but failed to complete validation requirements within the required 7-day period. When her phone was stolen in February 2024, Bastion reduced her claim indemnity limit to £75 in accordance with policy terms. However, with a £150 policy excess, Miss B could never derive any benefit from the policy. The ombudsman upheld the complaint, finding that while the validation requirements were reasonable and clearly communicated, the policy structure violated the FCA's Consumer Duty by failing to provide fair value or good outcomes. Bastion was ordered to refund both the premiums and the policy excess.

The Ombudsman's reasoning

While the validation requirements were reasonable and clearly communicated to Miss B, the ombudsman found that the policy structure created an unfair outcome. With a £150 excess and a reduced indemnity limit of £75, Miss B could never derive any benefit from the policy, meaning there was no genuine transfer of risk to Bastion. This breached the FCA's Consumer Duty requirement that products provide fair value and deliver good outcomes for customers. Therefore, Bastion should refund both the premiums and excess to put Miss B in a fair position.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website