Not upheld: claim handling, application of policy limits, third-party service provider responsibility complaint against RAC Insurance Limited

Decision detail

Summary

Mr and Mrs G complained about RAC's handling of a European motor breakdown claim after their car broke down twice during a holiday abroad. They objected to RAC's application of a £2,500 per claim limit, RAC's refusal to arrange a second opinion at a main dealer, and the resulting loss of value when they sold their unrepaired car at auction. The ombudsman found the claim limit was clearly stated in the policy terms and fairly applied, RAC was not responsible for third-party garage performance under the policy terms, and repatriation was appropriately offered in line with the contract. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the £2,500 claim limit was clearly stated in the policy terms under 'Significant and unusual exclusions or limitations' and was fairly applied. RAC was not responsible for the local garage's diagnosis or repair quality as the policy terms explicitly disclaim responsibility for third-party service providers. RAC did not refuse a second opinion but rather stated Mr and Mrs G would have to pay for it themselves, which was reasonable as RAC had already fulfilled its contractual obligation by taking the car to a garage. Repatriation was offered in line with policy terms when the garage could not confirm repairs would be completed before their return date. RAC's handling of the claim was fair and did not add unreasonable upset beyond what could be expected from a breakdown abroad.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website