Upheld: Unknown / needs review complaint against Newline Insurance Company Limited
Financial Ombudsman decision DRN-5943038 of 2026-02-20T00:00:00+00:00. Unknown / needs review complaint against Newline Insurance Company Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-5943038 |
|---|---|
| Decision date | 2026-02-20T00:00:00+00:00 |
| Firm | Newline Insurance Company Limited |
| Product | GAP / warranty insurance |
| Claim type | Unknown / needs review |
| Outcome | Upheld |
| Remedy | Newline must: (1) Cover Mr P's repair costs in line with policy terms and conditions; (2) Pay 8% simple interest on repair costs from date paid to date of payment; (3) Pay £100 compensation for distress and inconvenience caused. |
Summary
Mr P purchased a second-hand van in February 2025 and took out a motor warranty the following day. The dual-mass flywheel failed in May 2025 after less than 46,000 miles and one month of ownership. Newline declined the claim citing wear and tear based on an independent engineer's report concluding the failure was age-related fatigue. The ombudsman upheld the complaint, finding the failure was premature compared to the expected life expectancy of over 100,000 miles and should be covered. Newline was directed to pay repair costs plus interest and £100 compensation. A secondary complaint regarding data breach (engineer disclosing repair history) was noted but considered minimal detriment.
The Ombudsman's reasoning
The ombudsman found that while the independent engineer's report described progressive wear, a DMF should not fail at less than 46,000 miles when the expected life expectancy is over 100,000 miles. This constitutes premature failure and should be considered 'sudden' under the policy definition. Although the policy includes a definition for 'worn out', it contains no exclusions for wear and tear. The failure was not shown to be pre-existing before cover commenced. Therefore, Newline unfairly declined the claim in breach of FCA rules requiring insurers to deal with claims promptly and fairly without unreasonably declining them.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Newline Insurance Company Limited, all decisions | 16 | 19% |
| Unknown / needs review, all decisions | 4,876 | 28% |
| GAP / warranty insurance, all decisions | 1,253 | 37% |
Source
Read the original decision on the Financial Ombudsman Service website