Upheld: claim declined - alleged breach of security condition and dishonesty exclusion complaint against Red Sands Insurance Company (Europe) Limited

Decision detail

Summary

Ms D claimed on her bicycle insurance policy after her bike was stolen from her workplace. Red Sands declined the claim citing two reasons: breach of a security condition requiring the bike to be securely locked to an immovable object, and an exclusion for acts of dishonesty. The ombudsman found that while the bicycle was technically unattended under the policy definition, Red Sands failed to prove Ms D breached the security condition, as the wireless lock's disengagement resulted from an unexpected sequence of events rather than Ms D's failure to lock it properly. The ombudsman also rejected the dishonesty exclusion, finding Ms D's initial error about the lock type was a genuine mistake made in unusual circumstances and promptly corrected. The complaint was upheld, requiring Red Sands to accept the claim and pay £250 compensation for the prolonged delay and excessive burden on Ms D.

The Ombudsman's reasoning

The ombudsman found that while the bicycle was technically 'unattended' under the policy definition, Red Sands failed to prove Ms D breached the security condition. Red Sands' argument that Ms D failed to engage the lock was speculative and unsupported; the most likely explanation (supported by the lock manufacturer) was that the unexpected chain of events involving the stolen phone caused the wireless lock to disengage. Regarding the dishonesty exclusion, Ms D's initial error about the lock type was a genuine mistake made in unusual circumstances and was promptly corrected; this did not constitute dishonesty or fraud. Red Sands had not adequately pursued available evidence (such as the witness statement) and could not fairly hold against Ms D the decisions of third parties regarding CCTV access.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website