Motors Insurance Company Limited · DRN-6248241

The complaint Mrs W complains that Motors Insurance Company Limited (MICL) won’t give a refund of premiums after she asked to cancel her alloy wheel and cosmetic damage policy. What happened The events are well known to both parties so I won’t go into detail here. In summary, Mrs W had an alloy wheel and cosmetic damage warranty with MICL. Mrs W sold her car and says she contacted MICL to cancel the policy and request a refund. MICL say they didn’t receive any notification from Mrs W until after the policy had lapsed. So, MICL refused to give Mrs W a refund. Mrs W raised a complaint but MICL didn’t change their outcome. Still unhappy, Mrs W brought the complaint to this service. Our investigator upheld Mrs W’s complaint. He thought it was most likely Mrs W had contacted MICL and so they should provide a refund. MICL appealed. They said Mrs W didn’t follow it up with them as they’d expect, so they don’t think she did contact them. As no agreement could be reached, the complaint has been passed to me to make a final decision. Because I disagreed with our investigator’s view, I issued a provisional decision in this case. This allowed both MICL and Mrs W a chance to provide further information or evidence and/or to comment on my thinking before I made my final decision. What I provisionally decided – and why I previously issued a provisional decision on this complaint as my findings were different from that of our investigator. In my provisional decision, I said: “I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Based on what I’ve seen so far, I intend to uphold Mrs W’s complaint. There is a dispute between MICL and Mrs W as to whether contact was made and received to cancel the policy and request a refund. Based on what I’ve seen, I think it’s most likely that Mrs W did contact MICL. However, I don’t think this matters, I’ll explain why. The policy terms and conditions set out the following: “5. Automatic termination This policy will automatically terminate on whichever of the following happens first: 5.1 the date on which you dispose of, transfer ownership of the vehicle to another party, regardless of whether or not you inform the administrator” Mrs W bought the car from new in April 2021. I can see from records online that the car had a registered owner change on 27 October 2024. As the car changed ownership, the policy automatically cancelled on the above date. As per the policy term above, this is regardless of

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whether or not Mrs W informed the policy administrator. As the policy was cancelled, the policy again sets out what happens in those circumstances: “You may cancel this policy after 30 calendar days and receive a pro-rata refund of your premium based on the number of whole months remaining subject to the deduction of a cancellation fee of £30.” MICL haven’t provided any other reasons other than not receiving correspondence to cancel the policy for a refund to not be paid. As the policy was no longer on risk from 27 October 2024, in line with the policy terms and conditions I think a pro-rata refund is due. So, I intend to tell MICL to calculate it and pay it to Mrs W. MICL can still deduct a £30 cancellation fee in line with the terms. However, I also intend to tell MICL to pay Mrs W 8% simple interest on any refund due to her. This should be calculated from 30 October 2024 until the date payment is made. This represents 28 days after the date I think Mrs W first contacted MICL requesting the policy be cancelled.” I set out what I intended to direct MIC to do to put things right. And gave both parties the opportunity to send me any further information or comments they wanted me to consider before I issued my final decision. Responses to my provisional decision MIC didn’t respond to the provisional decision by the deadline. Mrs W accepted my provisional decision. However, she also provided evidence of when she sold her car to a motor trader. 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 thought carefully about the provisional decision I reached. Having done so, and as neither party has provided anything which could lead me to depart from my provisional decision, my final decision remains the same as my provisional decision, and for the same reasons. However, I do intend to change the redress calculation slightly. The date of sale in my provisional decision was based on the records available online. As Mrs W sold her car to a motor trader, I think the record online was when the motor trader then sold the car to someone else. Mrs W has provided confirmation from the DVLA that she sold her car to a motor trader on 30 September 2024. So, I think the refund should be calculated from this date. Putting things right To put things right, MIC should do the following: - Calculate and pay a pro-rata refund to Mrs W based on the policy being cancelled on 30 September 2024. o MICL can deduct a £30 cancellation fee in line with the terms. - Pay Mrs W 8% simple interest* on any refund due to her. This should be calculated from 30 October 2024 until the date payment is made.

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* If MIC considers that it’s required by HM Revenue & Customs to deduct income tax from that interest, it should tell Mrs W how much it has taken off. It should also give Mrs W a tax deduction certificate if she asks for one, so she can reclaim the tax from HM Revenue & Customs if appropriate. My final decision For the reasons I’ve explained above, I uphold this complaint and direct Motors Insurance Company Limited to put things right by doing as I’ve said above, if they haven’t already done so. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs W to accept or reject my decision before 21 April 2026. Anthony Mullins Ombudsman

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