Partially upheld: Service failures generally complaint against Marshmallow Insurance Limited

Decision detail

Summary

Mr U complained about Marshmallow Insurance Limited's cancellation of his motor insurance policy after his vehicle was taken without permission by someone he knew and subsequently seized by police. Marshmallow cancelled the policy citing both the vehicle impoundment and Mr U's failure to report the incident to police as required by the policy terms. The ombudsman found the cancellation itself was fair and reasonable given the clear policy requirement to report to police, but partially upheld the complaint due to Marshmallow's poor service including unclear communication and delays. Marshmallow was directed to pay £100 compensation for service failures.

The Ombudsman's reasoning

The ombudsman found that Marshmallow's cancellation was fair and reasonable because the policy explicitly required Mr U to report the incident to the police and obtain a crime reference number. Although Mr U did not make a claim and was dealing with the matter privately, the policy obligation to report to police was clear and unambiguous. The ombudsman understood why Marshmallow considered uninsured driving serious and expected police reporting. However, the ombudsman upheld the complaint regarding service failures, finding Marshmallow's communication about the cancellation was often unclear, they delayed responses, and could have been more supportive.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website