Partially upheld: unreasonable claims handling, unjustified policy cancellation, unfair premium increase complaint against Domestic and General Insurance PLC

Decision detail

Summary

Mr G claimed under his Multiplan appliance protection policy for a broken light bulb casing on his cooker. DGI failed to conduct a timely inspection, cancelled the initial appointment without notification, and then wrote off the cooker without assessment. Mr G repaired the cooker himself for £11.90, but DGI cancelled its cover and offered separate insurance at increased total cost (£27.77 vs £22.99). The ombudsman found the write-off decision unreasonable as no inspection had occurred, the cancellation of cover unjustified as no replacement was provided, and the premium increase unfair. The cooker was reinstated to the original policy at the original premium, and £100 compensation was awarded for trouble and upset.

The Ombudsman's reasoning

The ombudsman found that DGI's decision to write off the cooker was unreasonable because no inspection had taken place before the decision was made, meaning DGI could not have known whether the fault was repairable or beyond economic repair. The fact that Mr G successfully repaired the cooker for under £12 demonstrates that a timely inspection would likely have resulted in repair rather than replacement. The cancellation of cooker cover was unjustified as the policy terms only permit cancellation where a replacement is provided, which did not occur here. Requiring Mr G to pay additional premiums (£27.77 instead of £22.99) to insure the same four appliances creates an unfair outcome that cannot be justified. The £57 compensation for inspection delays was appropriate, and £100 compensation for trouble and upset was consistent with FOS guidelines and comparable cases.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website