Upheld: claim handling error, service failure, contradictory communications, policy cancellation without notification complaint against Admiral Insurance (Gibraltar) Limited

Decision detail

Summary

Mr F complained that Admiral Insurance initially told him his water-damaged car would be covered as a total loss, arranged salvage collection, but then reversed this decision and denied the claim. Admiral also cancelled his policy without notification and sent contradictory communications about claim settlement. While the ombudsman found Admiral's service was poor and caused significant distress over a seven-day period, the underlying claim was not covered because the water damage resulted from wear and tear rather than an accident. The ombudsman rejected Mr F's request for reimbursement of his new car purchase, finding he would likely have needed to buy a replacement vehicle anyway given repair costs exceeded the car's value and his need for reliable early morning commute transport. The ombudsman upheld the complaint for compensation only, requiring Admiral to pay £300 total (£125 additional to the £175 already paid).

The Ombudsman's reasoning

The ombudsman found Admiral caused considerable confusion and poor customer service by initially confirming the claim would be covered, arranging salvage, then later denying coverage and sending contradictory communications. However, the underlying claim was not covered because the water damage was caused by wear and tear rather than an accident. The ombudsman rejected Mr F's request for reimbursement of the new car cost, reasoning that Mr F would likely have needed to purchase a new car anyway given the garage's assessment that repairs would exceed the car's value and his need for reliable early morning transport. The compensation of £300 was deemed adequate for the seven-day period of confusion and distress caused by Admiral's service failures.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website