Upheld: Account administration errors complaint against Zego Insurance Limited
Financial Ombudsman decision DRN-6141888 of 2026-02-12T00:00:00+00:00. Account administration errors complaint against Zego Insurance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6141888 |
|---|---|
| Decision date | 2026-02-12T00:00:00+00:00 |
| Firm | Zego Insurance Limited |
| Product | Motor insurance |
| Claim type | Account administration errors |
| Outcome | Upheld |
| Remedy | Refund of £53.06 (comprising £3.06 additional premium and £50 administration charge) plus interest calculated at 8% simple per year from the date Zego charged Mr H to the date of refund |
Summary
Mr H complained about a £3.06 premium increase and £50 administration charge applied by Zego Insurance Limited after his declared 20 years' no claims discount (NCD) was reduced to 9 years based on a letter from his previous insurer. The letter was later corrected to show Mr H actually had 27 years' claims free driving. The Ombudsman upheld the complaint, finding that Mr H did not make an unfair presentation of risk and that Zego failed to provide evidence of how the NCD affected pricing. The Ombudsman ordered Zego to refund £53.06 plus 8% simple interest, reasoning that if the premium increased when NCD reduced from 20 to 9 years, it should decrease by the same amount when NCD is restored to 20 years.
The Ombudsman's reasoning
The Ombudsman found that Mr H did not make an unfair presentation of risk when declaring 20 years' NCD, as he reasonably believed this at the time and was unaware his previous insurer capped the discount at 9 years. The corrected letter showing 27 years' claims free driving actually lessens the risk and cannot constitute a qualifying breach of the Insurance Act. Critically, Zego failed to provide underwriting or pricing information to demonstrate the effect of the NCD on the premium, making it reasonable to assume that if the premium increased when NCD reduced from 20 to 9 years, it should decrease by the same amount when NCD is restored to 20 years. Therefore, neither the premium increase nor the administration charge were fairly applied.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Zego Insurance Limited, all decisions | 2 | 50% |
| Account administration errors, all decisions | 26,544 | 25% |
| Motor insurance, all decisions | 24,103 | 35% |
Source
Read the original decision on the Financial Ombudsman Service website