Not upheld: unfair cancellation charges and outstanding balance requirement complaint against Lexham Insurance Consultants Limited

Decision detail

Summary

Mr D complained that Lexham unfairly required him to pay the full annual motor insurance premium after he cancelled his policy mid-term in October 2025. At the time of cancellation, there was an ongoing third-party claim on his policy. Mr D claimed he had intended to request policy documents rather than cancel the policy, and disputed being liable for the full £1,695 premium. The ombudsman found that Lexham's online cancellation process provided clear information and warnings about the consequences of cancellation, the policy terms explicitly required full premium payment when a claim was pending, and Mr D's cancellation request was unambiguous. The ombudsman did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Lexham's online cancellation process provided clear and adequate information with explicit warnings about the implications of cancellation, including that full premiums would be due if a claim was pending. The policy terms explicitly stated that full annual premiums must be paid if an incident could give rise to a claim. The ombudsman was not persuaded the online process could be mistaken for a document request. Although Mr D felt it was unfair to pay the full premium while liability was undetermined, the policy terms clearly required this, and Lexham offered a fair remedy through an interest-free payment plan and commitment to refund premiums for cover after cancellation if the claim settled as non-fault.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website