Not upheld: unfair treatment in relation to cooling-off period cancellation and additional premium charges complaint against First Central Insurance Management Limited

Decision detail

Summary

Mr W purchased a motor insurance policy from First Central in October 2025, claiming 20 years' no-claims discount. When First Central requested evidence and subsequently reduced his no-claims discount to zero years, Mr W attempted to cancel within the cooling-off period but was unable to do so due to system limitations and lack of weekend support. First Central charged him £108.58 to cancel, leading Mr W to instead amend the policy and pay an additional premium of approximately £220.00, resulting in a total cost of about £520.00. The ombudsman found that while it would have been fairer to waive the cancellation fee, Mr W made an informed decision to keep the policy and therefore the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman acknowledged that it would have been fairer for First Central to waive the £50.00 cancellation fee since Mr W attempted to cancel within the cooling-off period. However, the ombudsman found that Mr W made an informed decision to pay the additional premium of approximately £220.00 to keep the policy rather than cancel it. The ombudsman was satisfied that First Central provided clear information about Mr W's options and respective costs through call recordings. The fact that Mr W did not cancel the policy even after being informed he could do so and pay only for time on cover reinforced the view that he had made an informed choice to continue with the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website