Upheld: unfair claim decline and unreasonable claim handling complaint against Financial & Legal Insurance Company Ltd

Decision detail

Summary

Mr C claimed on his motor warranty for a stretched timing chain issue identified through diagnostics. F&L initially declined the claim citing wear and tear, but Mr C complained that this was unfair and that the inspection should have cost limits. The ombudsman found F&L's initial decline was unreasonable because the cause of the stretch had not been established and timing chains on this vehicle model are a known issue not expected to last the vehicle's lifetime. The complaint was upheld with directions for F&L to arrange an independent inspection with a cost estimate provided to Mr C, and to pay £150 compensation for the distress and inconvenience caused by the unfair handling.

The Ombudsman's reasoning

The ombudsman found that F&L's initial decline was unfair because the cause of the timing chain stretch had not been established, making it unreasonable to decline based on wear and tear. The ombudsman disagreed with the investigator's view that timing chains are designed to last the lifetime of the engine, finding instead that they are a known issue with this vehicle model. The ombudsman considered the inspection by an independent engineer to be reasonable and necessary to determine coverage, but directed F&L to provide a cost estimate beforehand so Mr C could make an informed decision. Compensation was awarded for the distress and inconvenience caused by the unfair initial decline and subsequent handling.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website