Not upheld: claims mishandling; failure to review third party insurer communication complaint against The National Farmers' Union Mutual Insurance Society Limited

Decision detail

Summary

Mrs C complained that NFUM mishandled her motor insurance claim after a third party damaged her estate car in October 2025. NFUM decided the car was a total loss and paid £7,500 in settlement, but the third party's insurer subsequently repaired the car and returned it to Mrs C. NFUM then asked Mrs C to either repay the £7,500 or return the car. NFUM acknowledged it failed to review an email from the third party's insurer indicating they were dealing directly with the claim and offered £300 compensation. The ombudsman found NFUM's total loss decision was fair under the policy terms and that the administrative failure did not cause financial loss, as Mr and Mrs C had chosen to purchase a replacement vehicle after the settlement. The ombudsman did not uphold the complaint and found the £300 compensation offer appropriate.

The Ombudsman's reasoning

The ombudsman found that NFUM's decision to treat the car as a total loss was fair and reasonable under the policy terms, which gave NFUM discretion to decide whether to repair or settle as total loss. Although NFUM failed to review the third party insurer's email indicating they were dealing directly with the client, this failure did not cause financial loss to Mr and Mrs C. The ombudsman rejected Mr C's argument that NFUM should be responsible for the cost of the upgraded replacement vehicle, as Mr and Mrs C made the choice to acquire a newer vehicle after receiving the total loss settlement, and they had no reasonable expectation of getting the original car back. The ombudsman concluded that NFUM's £300 compensation offer was fair for the inconvenience and upset caused by the administrative failure.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website