Not upheld: unfair refund calculation on policy cancellation complaint against Dayinsure.com Limited

Decision detail

Summary

Mr A purchased a 140-day learner driver motor insurance policy from Dayinsure for £235.58 and cancelled after 5 days, receiving a £176 refund. He complained that he should have received a full or pro-rata refund within the 14-day cancellation period, citing FCA rules in ICOBS. The ombudsman found that ICOBS 7.2.4 permits insurers to use non-pro-rata methods where material unevenness in risk exists, and that Dayinsure's short-term rate structure complied with this rule. The terms were clearly disclosed to Mr A in the IPID and TOBA before purchase, which he confirmed understanding of. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that ICOBS 7.2.4 permits insurers to use methods other than pro-rata apportionment where there is material unevenness in risk incidence, provided the sum is reasonable and commensurate to risk incurred. Dayinsure's short-term rate structure complied with this rule. The terms were clearly disclosed to Mr A before purchase in the IPID and TOBA, which he confirmed understanding of. Therefore, Dayinsure acted fairly and in accordance with its terms and applicable regulations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website