Not upheld: Motor insurance, claim handling complaint against Marshmallow Financial Services Ltd

Decision detail

Summary

Miss A complained about Marshmallow's cancellation of her motor insurance policy following her failure to provide validation of her occupation status, the deeming of her vehicle as repairable rather than a total loss after a January 2025 accident, the vehicle being repaired at Marshmallow's approved repairer despite her explicit request not to repair it, increased insurance costs resulting from the cancellation, and delays in Marshmallow's complaint response. The ombudsman found Marshmallow acted fairly in cancelling the policy under the policy terms and in determining the vehicle was repairable, but acknowledged communication failures led to the vehicle being repaired against Miss A's wishes. The ombudsman concluded Marshmallow's offer of £500 compensation plus independent inspection and rectification costs was fair and reasonable, and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that while Marshmallow's communication about the vehicle's status could have been clearer, the policy gave them absolute discretion to determine repairability, and the engineer's report conclusion (not just its title) supported the repairable determination. On cancellation, the ombudsman concluded Marshmallow acted within policy terms as Miss A failed to provide requested validation information within the deadline. However, the ombudsman acknowledged communication failures regarding the repair authorization were unfair, though the offered remedy was deemed adequate. The increased insurance costs were attributed to both the policy cancellation (which was fair) and Miss A's claims history rather than Marshmallow's actions. The complaint response timeframe was reasonable given the complexity of issues.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website