Upheld: unfair recovery of outlay / irresponsible claims handling complaint against Watford Insurance Company Europe Limited

Decision detail

Summary

Miss K complained that her motor insurer, Watford Insurance Company Europe Limited, was seeking to recover £12,491.47 from her after a family member took her car without consent and was involved in a collision with a third-party vehicle. The family member was arrested and prosecuted for serious driving offences. Watford settled the third-party claim and sought recovery from Miss K, arguing she had breached policy terms by allowing an uninsured driver to use the car and by failing to report the car as stolen or support the prosecution. The ombudsman upheld the complaint, finding that Miss K did not consent to or permit the uninsured use of her vehicle based on evidence that she was not living at the family home at the time, had limited family contact, and was unaware that a third-party claim would later be made against her policy. The ombudsman concluded that while Watford acted fairly in settling the third-party claim, it was not fair or reasonable to pursue recovery from Miss K in these circumstances.

The Ombudsman's reasoning

The ombudsman concluded that Miss K did not consent to, permit, or cause the uninsured use of her vehicle based on evidence that she was not living at the family home, had limited family contact, and the car was taken in the early hours without her knowledge. The ombudsman rejected Watford's argument that Miss K's failure to report the car as stolen or support the prosecution implied consent, particularly because Miss K was unaware at the time that a third-party claim would later be made against her policy. The ombudsman found that Watford acted fairly in settling the third-party claim under the Road Traffic Act 1988, but it was not fair or reasonable for Watford to recover its outlay from Miss K given her personal circumstances and lack of involvement in the uninsured use. The ombudsman also noted that Watford failed to identify which specific policy terms Miss K had breached.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website