DRN-5925881

The complaint Ms W is unhappy with the settlement that Fortegra Europe Insurance Company Ltd has offered under the claim she made for damage to her sofas under her extended warranty. What happened The details of this complaint are well known to both parties, so I will not repeat them again in full detail here. But to briefly summarise, Ms W made a claim to Fortegra following damage to both her two-seater and three-seater sofas. Fortegra accepted her claim, but the sofas couldn’t be repaired due to parts no longer being available. So instead, Fortegra made the following offers of settlement: • A reselection voucher equivalent to the full purchase price of £2,544, which can only be used with the original retailer. • A cash settlement of £1,272 – equivalent to the cost to Fortegra of the above reselection voucher. Ms W isn’t happy with the offers because she can’t get a replacement, or even a suitably similar replacement, from the original retailer as they no longer stock them. An investigator at the Financial Ombudsman Service considered Ms W’s complaint. He thought Ms W’s claim should be upheld. He said the offers Fortegra had made would not adequately indemnify Ms W and so instead, Fortegra should pay Ms W a cash settlement for the full purchase price. Fortegra didn’t accept the investigator’s recommendations. So, as no agreement had been reached, the complaint was passed to me to decide. I reached out to Fortegra to understand why it was insisting on a replacement from the original retailer, when this wasn’t specified in the policy terms, and to ask whether it could provide a reselection voucher for any other retailers. In the absence of better evidence that Ms W could obtain a suitable replacement with a reselection voucher, I explained I was minded to agree that a cash settlement for the full purchase price would be a fairer outcome. Fortegra maintained its offer was sufficient to fairly indemnify Ms W. It said quality varies significantly between retailers, which is why a reselection voucher was only available for the original retailer. It didn’t accept the fact that Ms W being unable to source an adequate replacement from the original retailer meant its offer was unfair. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint.

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I’ve also thought carefully about Fortegra’s additional comments. Having done so, I’ve decided to uphold Ms W’s complaint for largely the same reasons I put to Fortegra in my recent email. That is, that I consider the basis of the contract between Fortegra and Ms W to be the policy terms and conditions. And that these do not state that settlement will only be available by reselection voucher limited to the original retailer. Nor that this would be the case even where this meant an adequate replacement cannot be obtained. The general principle of this type of insurance is that any claim settlement should put Ms W in the position she was in prior to the insured loss, or at least as closely as possible to that position. I therefore consider that a reselection voucher which will not allow her to be put even closely back into the position she was in cannot be a fair way to settle this claim. And it follows that a cash settlement limited to Fortegra’s equivalent cost of that same, unsuitable, reselection voucher, would likewise not be fair or reasonable. To be clear, if the terms were sufficiently clear that cover in the event of a claim would be restricted in this way, it’s possible I might find differently. Although I think it could still be questionable. But here, the policy terms do not restrict claim settlements in the way Fortegra is seeking to. Instead, they clearly state that where a replacement is required, the intention of the policy is to provide one of similar standard, specification and style as the original product. And in this case, I’m satisfied it has been demonstrated that Fortegra’s settlement options will not allow Ms W to do this. Again, for clarity, I don’t consider there is anything inherently wrong or unfair with offering claim settlement via a reselection voucher through the original retailer. I understand and accept this is fairly common practice. But I maintain that such a settlement can only be a fair and reasonable way of settling a claim, where the resolution it provides is in line with the policy terms and where it provides adequate indemnity. That’s where the current settlement offers fall down, for me, in this particular case. Based on the cover she bought and paid for, Ms W has a reasonable expectation that the claim settlement would allow her to replace her sofas with the same, or sufficiently similar sofas. But it’s clear that in this case, the reselection voucher Fortegra has offered, or the 50% cash alternative, will not allow her to do this. So, I don’t consider Fortegra has treated Ms W fairly by insisting on these options. Instead, it follows that because an adequate replacement can’t be sourced from the original retailer, and because Fortegra can’t provide a reselection voucher for another retailer which does stock a suitable replacement, I consider the fairest way for Ms W to be adequately indemnified for her loss is for Fortegra to pay her a cash settlement for the original purchase price. My final decision For the reasons set out above, I uphold Ms W’s complaint. Fortegra Europe Insurance Company Ltd must pay Ms W a cash settlement of £2,544 – the original purchase price of the sofas. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms W to accept or reject my decision before 14 May 2026. Adam Golding

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Ombudsman

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