Partially upheld: Motor insurance, claim handling complaint against Admiral Insurance (Gibraltar) Limited

Decision detail

Summary

Miss T complained about Admiral's recovery of £5,710.96 in third party claim costs following a collision caused by her uninsured family member. Admiral claimed £3,411.26 for repairs and £2,299.70 for hire car costs under the Road Traffic Act. The ombudsman upheld the complaint in part, finding that while the repair costs were reasonably evidenced and justified, the hire car costs were not properly verified or investigated by Admiral before recovery was attempted. Admiral failed to establish why a hire car was needed for a roadworthy vehicle, whether alternatives existed, or whether the third party was mitigating costs. The ombudsman directed Admiral to waive the £2,299.70 hire car costs and pay £300 compensation for distress and inconvenience, while allowing recovery of the £3,411.26 repair costs.

The Ombudsman's reasoning

While Admiral is legally required to cover third party costs under the Road Traffic Act and can recover these from Miss T under the policy terms, it must do so fairly and reasonably. The repair costs of £3,411.26 are supported by a comprehensive garage report and are reasonable. However, the hire car costs of £2,299.70 were not properly verified or justified. Admiral failed to investigate why a hire car was needed when the vehicle was roadworthy, whether alternatives existed, why an upgraded model was hired, or whether the third party was mitigating costs. Admiral's reliance on an agreed protocol to avoid detailed verification does not excuse it from taking reasonable care before passing costs to Miss T, particularly when she raised concerns and requested evidence. The delay in providing evidence caused Miss T distress and frustration.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website