Not upheld: unfair cancellation charges and lack of clarity in disclosure complaint against Collingwood Insurance Company Ltd (CICL)

Decision detail

Summary

Mr H purchased a learner driver car insurance policy with CICL through a broker and cancelled it seven months later after passing his driving test. He disputed the cancellation charges, claiming they were hidden in the documentation and unfair. The ombudsman reviewed the IPID and Policy Booklet provided at purchase and found that CICL had clearly disclosed the sliding scale cancellation charges (80% at month 7) in multiple documents that Mr H had reviewed and agreed to. The ombudsman concluded that while short-term rates are unusual in general insurance, they are standard for learner driver policies, and CICL had provided sufficient clarity about the charges. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that CICL had clearly explained the cancellation charges through multiple documents provided to Mr H before purchase. While short-term rates are unusual in general insurance, they are not unusual for learner driver policies. The ombudsman determined that providing clear information about charges means an insurer has not acted unreasonably, and Mr H had the opportunity to review the documentation and make an informed decision before buying the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website