Upheld: Motor insurance, claim handling complaint against RAC Insurance Limited

Decision detail

Summary

Mr H's car broke down abroad and could not be repaired locally. RAC valued the car at £2,000 and refused to repatriate it, claiming repair costs would exceed its value. Mr H paid £1,136.50 for repatriation and subsequently £1,680 for UK repairs. The ombudsman found RAC's valuation reasonable but determined that RAC provided no evidence to support its claim that repair costs would exceed the car's market value. Under the policy terms, if repair costs are less than market value, RAC must arrange repatriation. The ombudsman upheld the complaint and directed RAC to reimburse the repatriation costs plus interest and pay £300 compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman found that RAC's valuation of £2,000 was reasonable based on the price Mr H paid for the car and available market data. However, RAC failed to provide evidence to support its assertion that repair costs would exceed the car's market value. The policy terms state that if repair costs are less than market value, RAC must arrange repatriation. Without evidence of repair costs exceeding £2,000, repatriation fell within the policy terms. RAC therefore acted unfairly in declining to cover repatriation costs. The ombudsman rejected Mr H's claim about an assurance due to insufficient evidence but found RAC at fault for the repatriation decision itself. Repair costs were not covered under the policy terms and were not directed to be reimbursed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website