Upheld: unfair claim handling; improper withdrawal of courtesy car; failure to provide clear information about settlement options complaint against esure Insurance Limited

Decision detail

Summary

Miss J complained about esure's handling of a motor insurance claim following a non-fault accident in April 2025. esure declared the car a total loss valued at £3,000, which Miss J disputed. esure sent a cheque in early May but cancelled it without clear instruction from Miss J, then demanded return of the courtesy car before issuing any viable settlement payment, despite having previously told Miss J she could retain it for a defined period after payment. Miss J hired a car at her own expense (£321.78) due to her rural location and lack of public transport. The ombudsman upheld the complaint, finding esure's handling unfair because it failed to explain Miss J's options and withdrew the courtesy car prematurely, but upheld the car valuation as fair. esure was ordered to reimburse the hire car costs with interest and pay £300 compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman found that while esure was contractually entitled to withdraw the courtesy car upon total loss declaration, it had created a specific expectation that Miss J could retain it for a defined period after payment was issued. esure failed to explain Miss J's options (such as cashing the cheque on a 'without prejudice' basis) and cancelled the cheque without clear instruction to do so. Critically, esure demanded return of the courtesy car before actually issuing any viable settlement payment, which contradicted its own stated process and was unfair given Miss J's reasonable reliance on esure's earlier communication. The ombudsman recognised that for a consumer in a rural area without public transport, hiring a car was a reasonable response to being left without transport due to esure's unfair actions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website