Not upheld: unfair claims handling and settlement without adequate validation complaint against Tradex Insurance Company PLC

Decision detail

Summary

Ms S complained that Tradex unfairly paid out a third-party claim without proper validation, despite her assertion that no damage occurred, and that this impacted her insurance premiums. Tradex settled the claim on a without prejudice basis without initially requesting evidence, though it later obtained validation including cost details and an engineer's report. The ombudsman found that while Tradex should have investigated earlier given Ms S's dispute, the settlement amount was reasonable based on credit hire industry standards, and the £300 compensation offered for service failings was fair. The complaint was not upheld as Tradex acted within its policy terms and the existence of any claim would likely impact premiums regardless.

The Ombudsman's reasoning

The ombudsman found that while Tradex's policy terms permitted it to settle claims at its discretion, and ICOBS requires prompt and fair handling of claims, Tradex should have conducted some investigation before settling, particularly given Ms S's explicit dispute of the damage claim. However, the ombudsman considered the settlement amount reasonable based on GTA credit hire rates and the nature of the vehicle involved. The ombudsman found that Tradex subsequently obtained proper validation and that £300 compensation for the delay and poor communication was fair and reasonable. The ombudsman also noted that the existence of any claim would likely impact premiums regardless of the settlement amount.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website