Upheld: claims handling, policy documentation clarity, misleading information about excess and insurance record impact complaint against First Central Underwriting Limited

Decision detail

Summary

Mr N complained to the Financial Ombudsman Service about First Central Underwriting Limited after being involved in an accident in July 2025. Although Mr N decided not to claim and repaired his car privately, the incident was recorded on the CUE database. Mr N was also initially given incorrect information about his excess (£900 instead of £1,300) and later felt misled into not disclosing the incident to another insurer. The ombudsman upheld the complaint, finding that First Central poorly handled the claim withdrawal by continuing validation for five weeks despite Mr N's clear intention to withdraw, and that the policy documentation was unclear about the total excess. However, the CUE recording was found to be appropriate and required by regulation. First Central was ordered to pay £400 compensation for distress and inconvenience.

The Ombudsman's reasoning

First Central failed to handle the claim withdrawal appropriately by continuing validation for five weeks despite Mr N's clear intention to withdraw, causing unnecessary stress and inconvenience. The policy documentation was unclear about the total excess payable, with the £400 endorsement lacking proper explanation on the schedule itself. Additionally, First Central's letter about no impact on premiums was ambiguous and could reasonably lead Mr N to believe he didn't need to disclose the incident to other insurers. However, the CUE recording as 'notification only' was appropriate and required by regulation, as insurers must record incidents even when claims are withdrawn.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website