UK Financial Ombudsman - Insurance Complaint

Question

Apologies if this is the wrong 'stack' for this question, I did consider law, but a quick search of stacks showed insurance questions being asked here.

I had car insurance, I was hit, they party had car insurance (with the same insurer).

We rang ours, got a claim number, they told us to use theirs as it was their fault.

The repairs were done but the car was un-drivable - long dispute because they claim it was wear and tear and lack of service rather then the accident (but there was never a proper investigation into the issue on hand - lots of specific, not relevant to the question).

When I try to ring my insurance, they won't deal with it saying its now handled by the complaints team, and always put me through to them, and if I argue I want to speak to my insurance and make a claim, they say I can't and have to talk to the ombudsman. (Now we have a final notice etc).

So at this point, we take it to the ombudsman, after much more time wasted with them not repling (the insurance), the insurers claim:

"have stated that you don’t meet the requirement of an eligible complainant because the manner in which they’ve dealt with the claim hasn’t been done so against your own policy."

The ombudsman informs me that this is valid - you can't complain about something that isn't your policy (which makes sense, I can't register a complaint about, for example, the way my next door neighbours insurance paid out when their washing machine flooded their house for example).

I've already told the ombudsman that I've tried to deal with them as my insurers but they wouldn't let me start a claim - but what is the limitations of the Ombudsman? Is there any other help available? Does not that I'm making a claim on their insurance not make me some sort of temporary customer of theirs and protected by law?

Who regulates and controls 3rd party insurers at this point?

In future, should I always refuse to go through the 3rd party insurance and always claim on my own if this is a valid loophole?

Answer 1

If there's no regulator/ombudsman who can help, which sounds like it's the case here, then the ultimate backstop is legal action.

An claim like this, which is a fairly straightforward question of liability with a value of less than £10,000, is likely to be allocated to the "small claims track". This is designed to not require lawyers:

(b) The procedure laid down in Part 27 for the preparation of the case and the conduct of the hearing are designed to make it possible for a litigant to conduct his own case without legal representation if he wishes.

Importantly, you wouldn't normally be liable for the opposing side's legal costs even if you lose, though you might have to pay a small amount of their expenses e.g. for attending court. If you are considered to have acted very unreasonably you could also have to pay legal costs as well, but it's rare.

You will have to pay a fee to make a claim, though you'll be able to include it in your claim from the other side if you win. For a claim of £5,000, the fee is likely to be around £200-£400, so not a trivial amount unfortunately.

The process is documented in the Civil Procedure Rules, Part 27 and in the associated practice direction. Most importantly, you should start by writing a "Letter Before Action" that sets out the facts and the basis of your belief that they are liable. I'm not entirely sure if you should send it just to the insurer or also to the actual driver.

Once they reply to that, or if they don't reply within a reasonable time, you issue a claim. You can do this online (and it's cheaper to do so). The process and fees are detailed here.

This is the point at which you have to pay a fee, and at which the level of effort and stress probably ramps up. Hopefully they'll have responded to your letter before action setting out why they think they aren't liable, or you already have a clear explanation from them about it. Take a proper look at it from their perspective and think how someone neutral is likely to see it.

If you do issue the claim, and they don't decide to settle, then there'll be a court hearing to decide liability. Given that it's an insurance company, if you win you shouldn't have any problems enforcing the judgement (this can be an issue with suing people or smaller companies - if they can't or won't pay it can be difficult to make them).