Not upheld: policy administration, credit file marking, unclear communication complaint against UK Insurance Limited

Decision detail

Summary

Mr M complained about UK Insurance Limited's handling of his motor insurance policy cancellation, claiming that UKI's unclear communication led him to miss a final payment of £82.16 and resulted in a credit marker being placed against his name. Mr M argued that UKI should have informed him at the point of cancellation that a final instalment would still be due, and that the payment arrangement (in arrears rather than in advance) was not clearly communicated. UKI maintained that it had complied with its policy terms and conditions, which clearly stated the payment schedule and that the final payment would be due on 22 October 2025. The ombudsman did not uphold the complaint, finding that while exemplary service would have included a reminder about the outstanding payment, UKI's conduct was fair and reasonable given the clear contract terms, the formal letter sent on 20 October 2025 alerting Mr M to the outstanding payment, and subsequent letters that clarified the matter. The ombudsman concluded that Mr M bore responsibility for understanding the contract terms and that the credit marker was correctly applied.

The Ombudsman's reasoning

The ombudsman found that the starting point in such complaints must be the wording of the relevant policy documents which form the basis of the insurance contract. The October 2024 renewal communication clearly explained that payments were in arrears, with the final payment due on or just after 22 October 2025. While the ombudsman acknowledged it would have been exemplary service for UKI's agent to remind Mr M that one payment remained outstanding when he cancelled the policy, this omission was not unfair or unreasonable given the clear contract terms, the formal letter sent on 20 October 2025 alerting Mr M to the outstanding payment, and subsequent letters that made the matter beyond doubt. The ombudsman noted that Mr M had a responsibility to familiarise himself with key contract terms, and that the identical payment amount of £82.16 to the other 11 monthly instalments should have alerted him that this related to the 2024-2025 policy. The ombudsman concluded that the credit marker was correctly applied and that Mr M was responsible for the misunderstanding rather than UKI.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website