Not upheld: unfair pricing and auto-renewal; service failure in cancellation process complaint against UK Insurance Limited

Decision detail

Summary

Mr C complained about a 98% increase in his home insurance renewal premium from £107.85 to £214.82 and UKI's attempt to auto-renew at this higher price. He also experienced difficulties cancelling via the chatbot facility. UKI offered £50 compensation for the cancellation issue but maintained the pricing was correct. The ombudsman reviewed UKI's confidential pricing information and confirmed the quote was calculated fairly based on legitimate risk factors including a mid-term address change, standard industry rating factors, and claims inflation. The ombudsman found UKI complied with regulatory requirements and that the £50 compensation was reasonable, therefore not upholding the complaint.

The Ombudsman's reasoning

The ombudsman determined that insurance pricing is a commercial judgment for the business to make, and the FOS role is to assess whether a consumer was treated fairly or differently. The ombudsman reviewed UKI's confidential pricing methodology and confirmed the quote was calculated correctly based on standard risk factors. The address change was a legitimate reason for the price increase. The ombudsman noted that home insurance price increases due to claims inflation and rising costs are widely publicised and not uncommon. UKI complied with ICOBS requirements by reminding Mr C to shop around. The £50 compensation was reasonable given the issue was resolved quickly despite the frustrating chatbot experience.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website