Not upheld: mis-selling of motor insurance policy - alleged misunderstanding of cover level complaint against Principal Insurance Limited

Decision detail

Summary

Mrs B complained that Principal mis-sold her a motor insurance policy by failing to clarify that 'third party only' cover did not include 'fire and theft' protection. When her new car was stolen in July 2025, her claim was declined because she had purchased 'third party only' cover. Mrs B claimed she had asked for 'third party' cover assuming it meant 'third party, fire and theft' and was unaware of the difference. The ombudsman reviewed the call recording and found that Mrs B clearly stated she wanted 'third party' cover and the agent confirmed 'third party only' with no indication of confusion. The ombudsman also found that the documentation provided clearly explained the three types of cover available and that 'third party only' does not cover damage to the insured's own vehicle. The complaint was not upheld as Principal followed the customer's instructions and provided sufficient information at the point of sale.

The Ombudsman's reasoning

The ombudsman found that Principal, as a non-advised broker, was required to provide clear, fair and not misleading information but not to ensure the policy met the customer's needs. The call recording showed Mrs B clearly stated she wanted 'third party' cover and the agent confirmed 'third party only' with no indication of confusion. The documentation provided, including the IPID for the previous car with the same cover level, clearly explained the differences between the three types of cover and that 'third party only' does not cover damage to the insured's own vehicle. Principal followed Mrs B's instructions and provided sufficient information at the point of sale.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website