Not upheld: claim declined - application of policy exclusion complaint against Watford Insurance Company Europe Limited

Decision detail

Summary

Mr N complained that Watford Insurance Company Europe Limited unfairly declined his motor insurance claim following the theft of his car by someone posing as a potential buyer. The thief took the car's keys and V5 document while Mr N was distracted, showed a fake payment confirmation, and drove off without payment being received. Watford declined the claim based on a policy exclusion for theft by deception by someone claiming to be a buyer. The ombudsman found the exclusion was clearly stated in the policy and IPID, and that it was fair for Watford to apply it because Mr N failed to take reasonable steps to safeguard the vehicle, such as checking the thief's driving licence or confirming payment had been received before allowing the car to be driven away. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the policy exclusion for theft by deception was clearly stated and properly drawn to the consumer's attention. However, the ombudsman applied the principle that such exclusions are only fair and reasonable if the consumer took reasonable steps to safeguard the vehicle. The ombudsman concluded that Mr N failed to take reasonable precautions by not checking the thief's identity documents or insurance, and critically, by not confirming that the money transfer had actually been received before allowing the thief to drive away. Although Mr N may not have voluntarily handed over the keys, the ombudsman relied on his earlier account (closer to the event) rather than his later claim of distraction, and found that Mr N should have verified payment before allowing the vehicle to leave.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website