The following case study is from the Financial Ombudsman Service in which is details how an insured party’s nine year no-claims bonus was reduced to two years after an accident.
What happened
Andrew complained that his no-claims bonus was reduced from nine years to two years after an accident. The insurer explained its maximum no-claims bonus entitlement was four years, so it had reduced Andrew’s no-claims bonus to two years. It referred to a table towards the back of its policy document.
How the Financial Ombudsman Service helped
We investigated the complaint, and found that Andrew had declared nine years no-claims bonus when he bought the policy. This was also reflected within his policy documentation. We didn’t think it was clearly explained that the insurer’s maximum was four years, and Andrew probably would have bought a different policy if he’d known.
Putting things right
We said the insurer should provide Andrew with a letter saying he came to it with nine years’ no-claims bonus and that he only had two years due to its maximum entitlement being four years.
Whilst the majority of accident claims with insurers are thankfully trouble free, the Financial Ombudsman Service receives thousands of complaints each year about car and motorbike insurance, which is some 25% of all complaints about insurance products.
The FSO case study detailed here in respect of a low insurance settlement following a claim is unfortunately not an isolated incident.
Whilst the majority of accident claims with insurers are thankfully trouble free, the Financial Ombudsman Service receives thousands of complaints each year about car and motorbike insurance, which is some 25% of all complaints about insurance products.
The FSO case study detailed here in respect of a no claim bonus is unfortunately not an isolated incident.
The FSO routinely deal with instances were insured parties see their premiums rise following a non-fault accident claim, or have their no-claims and even protected no-claims bonus withheld following a non-fault accident claim.
As an insured party following an accident you are not obliged to use your insurer if you prefer to have independent legal advice.
Whilst mistakes can and do happen, having an independent legal expert in your corner can make all the difference.