The Financial Ombudsman Service (FOS) has issued the latest Ombudsman news which includes case studies of complaints involving travel and motor insurance. The FOS notes that the same issues crop up time and again within travel insurance complaints. Although travel insurance only made up 2 per cent of its caseload in 2013, the FOS upheld 53 per cent of cases – up from 42 per cent in 2011. Case studies focus on alcohol exclusions in travel insurance policies. Issues include poorly defined terms describing alcohol consumption and cases where such terms have been unfairly applied to reject a claim.
The FOS also considers motor insurance theft cases. In recent years the FOS has decided in around four in every ten cases that a claim has been wrongly rejected. In a large number of contested claims reaching the FOS, the meaning of leaving a vehicle “unattended” is called into question. The FOS will take into account the Court of Appeal’s judgment in Hayward v Norwich Union  EWCA Civ 243 and may decide that a vehicle was “attended” even if the driver was not in it, as long as they were close enough that their presence would be likely to deter a thief. The FOS notes that it can be difficult for an insurer to show that the insured was “reckless” and, in many cases, the FOS is likely to find that the insured was careless rather than “reckless”.
What is clear from the case studies highlighted is that the FOS expects a higher standard of proof from insurers, consistent with evidence. In reaching its decision, the Ombudsman will look at the exclusion the insurer is relying on, the evidence that it applies and whether the exclusion was drawn to the customer’s attention.
For further information:
Ombudsman news issue 120