Not upheld: claim classification and settlement fairness complaint against Watford Insurance Company Europe Limited

Decision detail

Summary

Mr H complained about how Watford Insurance handled his car insurance claim following a hit and run incident in July 2024. After another driver collided into his car, causing him to hit highway barriers, a third party claim was made against his policy for barrier damage. Watford settled the claim and recorded it as a fault claim because the third party driver could not be identified, meaning costs could not be recovered. Mr H wanted the claim recorded as non-fault, his No Claims Discount reinstated, and compensation for his car damage and distress. The ombudsman found that Watford acted fairly and reasonably by applying standard insurance industry practice, where claims are classified as 'fault' based on cost recoverability rather than fault attribution, and upheld the policy terms regarding excess and No Claims Discount adjustments.

The Ombudsman's reasoning

The ombudsman found that Watford correctly applied standard insurance policy terms when settling the claim. Although Mr H was not at fault for the incident, the claim is correctly classified as 'fault' because the costs were not recoverable from an identified third party. This is standard insurance industry practice. The policy excess was agreed by Mr H when purchasing the policy, and the reduction in No Claims Discount was in line with the policy wording. Without evidence of the third party driver, Watford could not pursue recovery, making the settlement and classification appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website