Not upheld: Motor insurance, claim handling complaint against ARAG Legal Expenses Insurance Company Limited

Decision detail

Summary

I, a company represented by Mr S, complained to ARAG Legal Expenses Insurance Company Limited about delays and lack of communication in handling a legal expenses insurance claim between June and November 2025. ARAG accepted they failed to update I about the claim's progress and offered £225 in total compensation (£150 for lack of communication and £75 for delays in reviewing complaints). The ombudsman found that while I had to divert effort from normal business activities to chase responses, the impact was limited to inconvenience. The ombudsman upheld ARAG's compensation offer as fair and reasonable in the circumstances.

The Ombudsman's reasoning

The ombudsman found that ARAG accepted they got things wrong by failing to update I about the position and delays in reviewing complaints. The ombudsman considered the impact on I, which included effort diverted from normal business activities through chasing responses and email exchanges. The ombudsman concluded the impact was limited to inconvenience rather than more substantial harm, and therefore the total compensation of £225 was fair and reasonable in the circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website