Not upheld: service failure in handling insurance claim and inadequate support for vulnerable customer complaint against Motability Operations Limited

Decision detail

Summary

Mr P complained to the Financial Ombudsman Service about Motability's handling of support following a car accident in July 2025. After the accident, Mr P experienced significant delays in getting his hired car repaired, poor communication, and loss of a courtesy car—issues primarily caused by Motability's insurance company. Motability upheld Mr P's complaint and offered mechanical termination of the hire agreement, an enhanced refund of his advance payment, and £625 in compensation, but Mr P felt this was inadequate given his vulnerable status. The ombudsman found that while Mr P was not treated fairly overall, Motability took reasonable steps to support him after becoming aware of the problems on 27 August 2025, and that shared liability with the insurance company meant the compensation offered was fair.

The Ombudsman's reasoning

The ombudsman acknowledged that Mr P was not treated fairly overall, but found that Motability took reasonable steps to support him after becoming aware of the insurance company's failures on 27 August 2025. While Motability arranged the insurance and therefore bore some responsibility for the insurer's actions, the ombudsman noted that insurance is a regulated activity and Mr P could pursue a separate complaint against the insurer. The ombudsman found that Motability's actions—including regular chasing of the insurance company and repairer, arranging a hire car, agreeing to mechanical termination, and providing an enhanced refund backdated to the accident date—demonstrated reasonable endeavours. Given the shared liability with the insurance company, the ombudsman considered the £625 compensation package fair and proportionate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website