Not upheld: Travel / life insurance claim disputes complaint against Motors Insurance Company Limited

Decision detail

Summary

Mr H claimed on his cosmetic car repair policy for a scratch approximately one metre long but less than 3mm deep. Motors rejected the claim, defining light scratches as maximum 30cm long or less than 3mm deep. Mr H argued the use of 'or' meant the claim should be valid if only one limitation applied, and submitted calculations showing the scratch's surface area fell within policy limits. The ombudsman rejected this interpretation, finding that the policy's purpose was to cover minor cosmetic damage and that exceeding either the length or depth threshold should result in claim rejection. The ombudsman upheld Motors' decision as fair and reasonable.

The Ombudsman's reasoning

The ombudsman considered the purpose of the policy was to cover light cosmetic damage that is quick and easy to repair. The ombudsman interpreted the policy limitations as requiring that damage must not exceed either the length or depth thresholds, not just one. The ombudsman reasoned that Mr H's interpretation would allow unlimited length scratches (if shallow) or unlimited depth scratches (if short), which would be unreasonable and contrary to the policy's purpose. The ombudsman acknowledged the wording could have been clearer but concluded Motors acted fairly and reasonably in declining the claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website