Not upheld: unfair policy cancellation; alleged ambiguity in policy terms complaint against Advantage Insurance Company Limited

Decision detail

Summary

Mr E complained that Advantage Insurance Company Limited unfairly threatened to cancel his motor insurance policy when his driving score fell below the required minimum of 30. Mr E argued the policy terms were ambiguous and contradictory, and that he should have been given time to improve his driving score rather than face cancellation. He also raised concerns that his personal vulnerability was not appropriately considered. The ombudsman found the policy terms were clear and unambiguous, that Mr E's driving behaviour (including speeding at 50% above the speed limit and mobile phone use) clearly breached the policy conditions, and that Advantage reasonably applied the cancellation clause. The ombudsman noted that Advantage provided three weeks' notice, waived charges, and allowed Mr E to cancel the policy himself without penalty, demonstrating fair treatment. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found the policy terms were clear and unambiguous, requiring the driving score to remain above 30 at all times. The term 'appropriate action' referred to either arranging alternative insurance or paying an additional premium, not improving the driving score. The policy explicitly stated that Advantage 'may' cancel if the score fell below 30, and Mr E agreed to these terms when taking out the policy. The ombudsman noted that telematics policies are designed to minimize accident risk, and when a policyholder's driving style becomes incompatible with the covered risks, cancellation is a reasonable response. Advantage's provision of three weeks' notice and waiver of charges demonstrated fair treatment. The ombudsman concluded that Mr E's vulnerability did not make it unfair to apply the policy terms.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website