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

Decision detail

Summary

Mr H's car broke down on a motorway and he managed to move it to the hard shoulder, but could only travel at 5 mph. Bastion declined his breakdown insurance claim, arguing the car wasn't completely immobile. The ombudsman upheld the complaint, finding that while the car was technically moveable, it was not practically mobile and driving at 5 mph on a motorway would be dangerous and illegal. The ombudsman applied a fair and reasonable test rather than strict contractual interpretation, noting that Bastion itself initially offered recovery costs and compensation. Bastion was ordered to pay Mr H's recovery costs plus 8% interest and £200 compensation for stress and inconvenience.

The Ombudsman's reasoning

The ombudsman applied a fair and reasonable test rather than a strict contractual interpretation. While the car was technically moveable, it was not what most people would consider 'mobile' given it could only travel at 5 mph on a motorway. The ombudsman found that driving at such a speed on a motorway would be dangerous and illegal, making the car effectively immobile for practical purposes. The ombudsman noted that Bastion itself initially accepted this position by offering recovery costs, and that the circumstances Mr H faced (mechanical failure requiring roadside assistance while stranded on a busy motorway) were exactly the type of situation the policy was designed to cover.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website