DRN-6204415

The complaint Mr H complains about how First Central Underwriting Limited handled a claim made on his motor insurance policy. What happened Mrs H, a named driver on Mr H’s policy, collided with a bent bollard in a car park, and Mr H made a claim on his policy. Mr H thought the car park operator was at fault. But Mr H was unhappy that First Central recorded the claim as fault without first investigating it. He thought First Central hadn’t obtained CCTV footage of the incident. Mr H thought First Central hadn’t implemented the resolution it agreed when he complained. He thought it had delayed settling the claim. And he thought it hadn’t provided him with a suitable courtesy car. Mr H wanted the claim recorded as non-fault and his excess reimbursed. First Central agreed there had been delays and a lack of communication. It said it would allow Mr H’s No Claims Bonus (NCB) to be unaffected once the claim was closed and it offered Mr H £150 compensation. But it didn’t change how the claim was recorded. After the complaint came to us, First Central increased its compensation offer to £550. It said it would continue to pursue recovery of its outlay and keep Mr H updated. Our Investigator recommended that the complaint should be upheld in part. She thought First Central had caused delays in the claim and had incorrectly applied English rather than Scottish law. She thought First Central had correctly recorded the claim as a fault whilst it remained open. She didn’t see evidence that First Central had agreed to record the claim as non-fault, but that it said it would protect Mr H’s NCB. She thought the policy excess was payable. She thought First Central had provided a courtesy car in keeping with the policy’s terms and conditions. And she thought it had tried to accommodate Mrs H’s mobility needs, albeit without success. She thought First Central had dealt with Mr H’s concerns about corrosion in the car. And she thought its offer of £550 compensation for the trouble and upset caused was fair and reasonable. Mr H replied that his concern wasn’t about compensation but about whether First Central had properly determined that the claim should be fault or non-fault. He wanted an Ombudsman’s review of First Central’s investigation before its initial fault determination. He thought the policy excess was only payable for fault claims. He thought it was unfair that he would later have to raise a further complaint if First Central recorded the claim as fault. 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. Mr H said Mrs H had collided with a bent steel bollard in a car park and damaged their car. Mr H was adamant that the car park’s owner was at fault. And I can understand that Mr H wants his claim closed as non-fault. The investigator has already explained that it isn’t our role to decide who was responsible for causing the accident. This is the role of the courts. Instead, our role in complaints of this nature is simply to investigate how the insurer made the decision to settle the claim. Did it

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act fairly and reasonably and in line with the terms and conditions of the policy? And has it treated Mr H the same as someone else in his position. As set out on page 72 of Mr H’s policy booklet, First Central is entitled under the terms and conditions to take over, defend, or settle a claim as it sees fit. Mr H has to follow its advice in connection with the settlement of his claim, whether he agrees with the outcome or not. This is a common term in motor insurance policies, and I do not find it unusual. Insurers are entitled to take a commercial decision about whether it is reasonable to contest a third party claim or better to compromise. That said, we expect an insurer to reasonably investigate a claim and consider the evidence available before making a decision on liability. But in Mr H’s case, liability is yet to be established. I can see that First Central has agreed that it should have applied Scottish rather than English law when Mr H first raised his claim. This holds the occupier liable for the consequences of any negligence that leads to damage. But First Central would have to show that the occupier knew of the damage, that the damage had been there for a period of time, and that steps hadn't been taken to rectify the issue. First Central said it continues to pursue the occupier to accept liability. But there’s no guarantee that this will be successful and that it will recover its outlay. In that case, in keeping with standard industry practice, the claim would be recorded as fault against Mr H. I acknowledge that Mr H wants the matter settled now. But as liability has yet to be settled, I can’t consider that further here and Mr H would have to complain again to First Central if he was unhappy with the outcome. In the meantime, there is an open claim and, in keeping with standard industry practice, this is recorded as a fault whilst it is being investigated. So I think First Central correctly recorded the open claim as a fault. If it is closed as non-fault, then First Central will recalculate Mr H’s premium if it has been affected by the open claim. I can see that there’s been some confusion about what was said to Mr H about the claim when he complained about delays. Mr H thought First Central told him the claim would be non-fault. But I haven’t seen evidence to show this. However, I can see that First Central agreed, as a gesture of goodwill to compensate him for the delays and poor communication, that the claim wouldn’t affect Mr H’s NCB. Mr H thought First Central should have obtained CCTV footage that he said would show he wasn’t at fault. I acknowledge that this caused Mr H frustration. But I can’t see that CCTV footage would have changed the outcome of his claim as the circumstances weren’t in dispute. Mr H thought the policy excess was only payable for fault claims. But I don’t agree. The policy excess is always the first part of a claim to be paid, regardless of fault. The excess is considered to be an uninsured loss. But First Central has offered to request it to be reimbursed along with its outlay if liability is settled as non-fault. I think that’s fair and reasonable. Mr H was unhappy that First Central hadn’t provided a courtesy car that suited his wife’s mobility needs. He thought this was contrary to the Equality Act. As the Investigator explained, it’s not our role to decide if First Central has acted unlawfully. Our approach in cases like this is to consider whether the insurer acted in line with the terms and conditions of the policy and fairly and reasonably. I can see that the policy provides for a small courtesy car whilst a policyholder’s car is being repaired. The car provided to Mr H didn’t suit Mrs H’s needs. Other policies I’ve seen do provide a like for like replacement car, but not Mr H’s policy.

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I can see from its file that First Central tried to accommodate Mrs H’s needs, outside the policy’s terms and conditions. And so I think First Central met its obligations under the policy’s terms and conditions, and it acted fairly and reasonably. Mr H thought the delay in the repairs was causing corrosion to develop in the unrepaired panel of his car. But I think it was reasonable for First Central’s repairer to remedy this when the repairs were made. And I can see that the panel was replaced so Mr H didn’t suffer any loss. First Central has accepted that it made mistakes in progressing the claim: • It applied English rather than Scottish law when considering liability. • It didn’t keep Mr H updated. • It wasn’t proactive in pressing the car park owner on liability. • It had caused delays in starting the repairs, though I note that Mr H was still mobile as his car was roadworthy. When an insurer makes errors, as First Central accepts it has done here, we expect it to restore the consumer’s position as far as it’s possible to do so, and we expect it to compensate the consumer for the impact of the error. From what I can see, Mr H’s car has been repaired. And First Central has said it continues to press the property owner on liability. I think that reasonably restores Mr H’s position. First Central has now offered Mr H £400 further compensation in addition to the initial £150. This makes a total of £550 compensation for the frustration and stress caused by its handling of the claim, its poor communication, and the delays in repairs. I think that’s fair and reasonable as it’s in keeping with our published guidance for the impact of errors over several months. And so I don’t require First Central to increase this. Putting things right I require First Central Underwriting Limited to pay Mr H £400 further compensation (£550 in total) for the distress and inconvenience caused by its handling of his claim. My final decision For the reasons given above, my final decision is that I uphold this complaint in part. I require First Central Underwriting Limited to carry out the redress set out above as it’s agreed to do. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr H to accept or reject my decision before 13 May 2026. Phillip Berechree Ombudsman

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