Upheld: failure to properly notify of policy cancellation; unfair communication of significant policy change complaint against AmTrust Specialty Limited

Decision detail

Summary

Mr S held a gadget insurance policy with ASL that was cancelled in September 2025 when ASL withdrew the product from the market. Although ASL sent a written cancellation notice to the correct address in July 2025, Mr S claims he did not receive it. When Mr S attempted to claim for a damaged smart watch in October 2025, ASL declined the claim as the policy was no longer in force. The ombudsman upheld Mr S's complaint, finding that while ASL was entitled to cancel the policy, it acted unfairly by not communicating the cancellation using two durable mediums and failing to send further confirmation after cancellation, as per FOS service standards. The ombudsman directed ASL to pay Mr S £100 compensation to recognise the shock and frustration caused by the inadequate notification, while noting that Mr S should have noticed the missing premium payment in September 2025.

The Ombudsman's reasoning

While ASL was entitled to cancel the policy and followed the policy terms by sending written notice to the correct address, the method of communication fell short of FOS service standards. FOS deems it reasonable to send notification of significant policy changes by two durable mediums with further confirmation after cancellation. Had ASL followed this approach, Mr S would most likely have known the policy was cancelled and would not have attempted to make a claim. The £100 compensation recognises the shock and frustration Mr S experienced upon discovering he had no cover, while also accounting for the fact that Mr S should have noticed the missing premium payment in September 2025 and that he ultimately had no valid policy at the time of the claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website