First Central Underwriting Limited · DRN-5987865

The complaint Mr B complains that First Central Underwriting Limited (First Central) declined his claim on his motor insurance policy after he had an accident whilst driving his wife’s car. What happened Mr B held a motor insurance policy with First Central. He had an accident when he was driving his wife’s car and made a claim using the ‘driving other cars’ (DOC) provision of his policy. First Central initially confirmed to Mr B that he would be covered for damage to the third- party car. However, Mr B was then contacted to say that he wasn’t insured because he was driving his wife’s car. First Central said under the policy terms he wasn’t covered for driving a car belonging to his wife. Mr B complained to First Central that this wasn’t made clear in the policy documentation. First Central’s decision remained unchanged. However, it accepted that their call handlers had misinformed Mr B during the claim process and cause some distress and inconvenience. It paid him £300 compensation. Mr B remained unhappy, so he brought his complaint to this service. Our Investigator upheld the complaint. They didn’t think First Central had acted fairly. They didn’t think First Central had taken reasonable steps to bring the policy exclusion to Mr B’s attention. They recommended First Central pay Mr B’s claim, refund the police compound fees and pay a further £200 in compensation for the distress and inconvenience caused. First Central didn’t agree. It said the term was sufficiently highlighted on the customer journey screens when Mr B took out the policy. As it didn’t agree, it asked for an ombudsman to review the complaint I issued a provisional decision on Mr B’s complaint. I was minded to uphold the complaint and this is what I said: I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. First Central has declined Mr B’s claim due to an exclusion for driving his wife’s car. I have considered whether it was fair and reasonable for First Central to do this. Mr B’s policy contains an exclusion for driving his wife’s car. However, I’m not satisfied it is fair or reasonable for First Central to rely on this term in this case. I’ll explain why.

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It is good industry practice that any unusual, significant or onerous policy term should be highlighted to a prospective policyholder at the point of sale or, if a later introduction, at renewal. Having looked at the policy term, I don’t consider it to be unusual. However, I do think it is a significant term due to the impact it could have on cover. So, I’ve thought about whether this significant term was sufficiently drawn to Mr B’s attention. In general, it is good industry practice for an insurer to provide a policy summary or key facts document, which includes any significant terms. The term First Central relied on can be found on page 19 of the 62-page policy wording and I cannot see the term highlighted in the Insurance Product Information Document (IPID) or any welcome documentation. In considering the overall evidence, including the screenshots of the customer journey, I’m not persuaded First Central has provided sufficient evidence to show it made it clear to Mr B that he would have been excluded from driving his wife’s car. Therefore, I’m not satisfied it was fair or reasonable for First Central to rely on the term and decline his claim. So I think the complaint should be upheld. I’ll move on now to what I think First Central needs to do to put things right. With regards to the claim, I’m satisfied from Mr B’s complaint submissions that he was aware that he had taken out a motor insurance policy with third party, fire and theft, to drive other cars. But I don’t think First Central has treated Mr B fairly when it declined the claim. So First Central should now reconsider the claim for the third-party car under the DOC policy provision (subject to the policy excess). I have thought about the costs. I think Mr B would have always had the storage costs that he incurred when his wife’s car was impounded by the police, so I’m satisfied he would have incurred this cost even if First Central had agreed to consider the third-party’s claim from the outset. So I don’t think I can reasonably require First Central to pay for the storage costs. I’ve also thought carefully about the distress and inconvenience Mr B has suffered in relation to this complaint. I’ve considered what happened, and I think the overall level of distress and inconvenience Mr B experienced was considerable. First Central acknowledged Mr B had received a poor level of service and paid £300 compensation. I’m satisfied that’s reasonable and in line with our guidance and similar awards we’ve made in similar situations where the impact of a business’s mistake has caused considerable distress, upset and worry. I consider that is fair and reasonable. I’m not minded to award anything more. For the reasons I’ve set out above, subject to either party providing me with further information, I intend to uphold this complaint and require First Central Underwriting Limited to do the following to put things right: • Reconsider the third-party claim without applying the exclusion First Central has relied on (subject to the policy excess). The responses to my provisional decision I invited both First Central and Mr B to respond to my provisional decision. First Central responded saying that not only does it flag the exclusions before the sale, but it also shows it in the policy document. It also provided a screenshot of the customer journey it

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had previously sent to this Service. First Central thinks it made it clear to Mr B that driving a partner’s car is excluded. Mr B accepted the provisional decision. 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. I’ve carefully considered First Central’s submissions. I’ve looked the evidence First Central has referred to. But I don’t think this wording is sufficiently clear to highlight to Mr B that he would have been excluded from driving his wife’s car. I note in First Central’s response, it said that not only is it flagged before the sale, but it is also in Mr B’s policy and highlighted the term on the customer journey screen. But I still don't think this is enough, as the more significant, unusual or onerous a policy term is, the greater the effort to bring it to the consumers attention should be, so that a consumer can easily understand how the policy will work in practice. I’m not satisfied the term was sufficiently brought to Mr B’s attention in the policy booklet and it is not detailed at all in the IPID. And I note the application required Mr B to click on the link. So I don’t think the notification that First Central says it gave Mr B in the policy document and link is significantly prominent given the significant consequences of driving his wife’s car could bring. So having considered First Central’s comments, I find no reason to depart from the outcome I reached in my provisional decision. Therefore, to put things right First Central should reconsider the third-party claim without applying the exclusion it has relied on (subject to the policy excess). My final decision For the reasons set out above, my final decision is that I uphold this complaint. To put things right First Central Underwriting Limited should reconsider the third-party claim without applying the exclusion it has relied on (subject to the policy excess). Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 21 April 2026. Lorraine Ball Ombudsman

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