Not upheld: claims handling and premium charging following third party incident complaint against First Central Underwriting Limited

Decision detail

Summary

Mr A claimed on his car insurance policy after his vehicle was hit by a third party in August 2025. First Central settled the claim by paying market value but charged Mr A the excess and continued collecting monthly premiums. When Mr A cancelled his Direct Debit, a default credit warning was issued. Mr A complained that First Central had not done enough to trace and recover costs from the third party, and sought refunds and compensation. The ombudsman found First Central acted fairly in abandoning recovery efforts when the vehicle registration plate could not be identified from CCTV footage, and that charging the full year's premium was in line with standard industry practice and policy terms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that First Central's decision to settle the claim and abandon recovery was reached fairly after receiving responses from the business. The policy terms allow the insurer to take over defence and settlement, and this must be exercised fairly and reasonably. The ombudsman considered it standard industry practice that the full year's premium is due once a claim has been made and paid. First Central's explanation could have been clearer but the policy terms were correctly applied and no negative credit marker was added to Mr A's record.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website