Not upheld: administrative error and poor service in policy underwriting and cancellation complaint against First Central Underwriting Limited

Decision detail

Summary

Mr N complained that First Central provided poor service and made errors when he took out a motor insurance policy. First Central incorrectly identified an undisclosed insurer-led policy cancellation for the named driver and issued a cancellation notice, leading Mr N to request customer-led cancellation. First Central later discovered it had made a mistake and reinstated the policy from the cancellation date, requesting £188.87 to bring payments up to date. Mr N objected to paying a premium for a period he believed he had no cover. The ombudsman found the reinstatement was fair because Mr N remained fully insured during the disputed period and would benefit from any claims, and the £200 compensation already paid was adequate for the stress and inconvenience caused.

The Ombudsman's reasoning

The ombudsman acknowledged First Central's mistake but found that reinstating the policy from the cancellation date was necessary to maintain continuous cover and prevent a gap in insurance. Although Mr N believed he had no cover for nearly three weeks, he was in fact fully insured during that period and would benefit from any claim made during that time. The £200 compensation was deemed fair for the stress and inconvenience caused by the single large mistake. The requested payment of £188.87 was to bring the monthly payment plan up to date, not to charge for the disputed period itself.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website