Upheld: Motor insurance, claim handling complaint against Fortegra Europe Insurance Company Ltd

Decision detail

Summary

Ms S claimed on her motor warranty and Fortegra attempted to limit labour costs to £50 per hour, arguing this was the rate charged by its network repairers. However, Ms S could not use any network repairer as none would complete the required work. The ombudsman upheld the complaint, finding that the 'excess charges' clause in the policy only applies when the network can actually deliver the service at a lower cost. Since Fortegra could not demonstrate any network repairer could do the work, it must pay the full claim based on Ms S's quote.

The Ombudsman's reasoning

The policy's 'excess labour charges' clause is only fair if Fortegra's network can actually provide the repair at a lower cost. Since Fortegra could not demonstrate that any network repairer within reasonable distance could complete the work, there were no excess charges to apply. The principle of limiting liability to network rates is reasonable only when the network can actually deliver the service; where it cannot, the policyholder should not be penalised for using their own repairer.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website