Not upheld: claim settlement and policy payout limits complaint against Admiral Insurance (Gibraltar) Limited

Decision detail

Summary

Mrs C & Mr C claimed that Admiral Insurance should have paid out fully for two separate motor insurance claims following collisions in August and October 2025. Admiral initially quoted £3,884.67 for the second claim but later said it could only pay once under the policy. The ombudsman found that Admiral acted fairly by settling both claims as one, paying the total original market value of £4,434.67 less one excess of £550 (£3,884.67 total). This prevented over-indemnification under the insurance contract principle of indemnity, as paying two full market value claims would have exceeded the car's actual pre-accident value. Although Admiral's communication was poor and system delays caused the claims to be combined rather than settled separately, the financial outcome complied with policy wording and was fair and reasonable.

The Ombudsman's reasoning

The ombudsman applied the principle of indemnity under insurance contracts, which prevents policyholders from receiving more than the actual loss. The policy wording limits payment to market value. After the first write-off, the car's market value became the salvage value of £798.24. Therefore, combined settlements should equal the original market value (£4,434.67) less one excess (£550), totalling £3,884.67. Paying two separate full market value claims would result in over-indemnification. While Admiral's communication was poor and system delays caused the claims to be settled as one rather than separately, the financial outcome was fair and in line with policy terms.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website