Not upheld: premium charges and claim settlement; service failures in communication and call handling complaint against First Central Underwriting Limited

Decision detail

Summary

Mr B complained about First Central's handling of his motor insurance claim following the theft of his car in March 2025. After the policy was cancelled in May 2025 due to a missed payment, First Central demanded £401.25 in outstanding premiums, which Mr B disputed. Mr B argued he had not been adequately informed that premiums would continue after his claim and that receiving cancellation emails during an active claim was confusing. First Central offered £150 compensation for service failures but maintained the premiums were due under the policy terms. The ombudsman did not uphold the complaint, finding that the policy terms clearly required continued premium payments and that Mr B was bound by these terms agreed at inception, despite the service failures identified.

The Ombudsman's reasoning

The ombudsman found that the policy terms and conditions, which Mr B agreed to in October 2024, clearly stated that premiums would remain due even after a claim was made. Although First Central failed to remind Mr B of this obligation when he reported the theft, and had service failures in August 2025, the substantive issue of whether premiums were owed was determined by the clear contractual terms. The ombudsman rejected Mr B's argument that the claim settlement after cancellation created a legal contradiction, noting that the claim arose when the policy was in force. The £150 compensation was deemed adequate for the service failures identified.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website