Upheld: Motor insurance, claim handling complaint against The Equine and Livestock Insurance Company Limited (ELICO)

Decision detail

Summary

Mr C claimed on his caravan insurance policy after his son-in-law struck a low underpass while towing the caravan, causing roof damage. ELICO declined the claim, arguing Mr C breached the policy's reasonable precautions condition. The ombudsman upheld the complaint, finding that ELICO failed to demonstrate the son-in-law recognised the height restriction risk, particularly given the distractions from crying and medical alarms from young children and the driver's inexperience. The ombudsman directed ELICO to settle the claim in line with remaining policy terms and pay £200 compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman applied the recklessness test from Sofi v Prudential, which requires an insurer to show that a policyholder: (1) recognised a risk, and (2) took no measures or inadequate measures to avert it. The ombudsman found that ELICO failed to demonstrate the son-in-law recognised the height restriction risk, given the distractions from the young children and his unfamiliarity with the route. Therefore, ELICO could not fairly rely on the reasonable precautions term to decline the claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website