Not upheld: refusal of insurance cover / underwriting decision complaint against UK Insurance Limited

Decision detail

Summary

Mr B complained that UK Insurance Limited unfairly refused to continue cover for his Motability scheme vehicle following a mid-lease review. UKI's decision was based on eight claims totalling over £80,000 made within two years, with both drivers involved in multiple accidents. Mr B argued that a persistent braking fault explained the accidents and that UKI had not properly considered this. The ombudsman found that insurers are entitled to set their own underwriting criteria and that Mr B's claims history placed him well outside UKI's risk appetite. The ombudsman noted insufficient evidence of the braking fault and that Mr B had not followed scheme procedures to report vehicle defects. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that insurers are entitled to determine what risks they wish to insure and at what price. UKI's underwriting criteria clearly indicated Mr B's claims history placed him outside their risk appetite. The ombudsman noted that while understanding the impact on Mr B, the FOS cannot instruct insurers to cover risks beyond their criteria. The alleged braking fault was not sufficiently evidenced across the claims, and Mr B had not followed scheme procedures to report such faults. UKI also had a duty to consider the impact on other Motability scheme customers if high-value claims continued.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website