Not upheld: premium calculation and pricing fairness complaint against NATIONAL FARMERS UNION MUTUAL INSURANCE SOCIETY LIMITED (trading as NFU Mutual)

Decision detail

Summary

Mr F complained that NFU charged him a higher premium of £24.83 when he removed one of two cars from his renewal policy before the renewal date. He believed NFU should have honoured the original renewal quote and that the risk had not changed. NFU upheld the complaint in part, acknowledging it should have explained the premium change more clearly during the call, but maintained the recalculation was correct due to the removal of the multi-vehicle discount. The ombudsman found that NFU acted fairly in recalculating the premium based on its risk rating methodology and that the notice period provided was sufficient under industry practice. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman determined that insurers have discretion in how they apply risk ratings and pricing, and the FOS cannot interfere with commercial pricing decisions. NFU's recalculation was justified because the removal of one vehicle eliminated the multi-vehicle discount that was factored into the original renewal quote. While NFU's communication during the call was unclear, it provided adequate explanation in its complaint response. The notice period of over three weeks was sufficient under industry practice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website