Information for financial businesses on handling and resolving complaints about telematics (black box) vehicle insurance.
We hear from customers who are unhappy about their telematics (black box) insurance policy. When we investigate these complaints, we’ll:
- look at both sides of the story and all the evidence available
- decide what’s fair and reasonable in the circumstances
Types of complaint we see
People might complain to us because:
- they think that incorrect driving scores have resulted in their policy being cancelled
- they think that incorrect driving scores have increased the cost of their policy
- they weren’t told important information about the telematics system when buying the policy - for example, the impact of driving at night on their score
Deciding who is responsible for the complaint
Who is responsible depends on what the complaint is about.
The firm selling the policy is responsible for a complaint about how it was sold. This includes the policy’s suitability and information the customer was given during the sale. This is the same as with non-telematics policies
We often find some confusion around who is responsible for complaints about the telematics system and the use of the data.
Usually, it’s a policy requirement that the customer has a black box or an app to provide the data for the insurer to decide what to charge and/or whether to continue providing cover.
Under normal circumstances, the insurer will be responsible for the box or app and the data it provides. This is because by providing the box and using its data, the insurer is carrying out the regulated activity of ‘effecting and carrying out a contract of insurance’. Only the insurer will have permission from the Financial Conduct Authority (FCA) for this.
Often there’s a box provider, administrator or intermediary that manages the box and provides the data. Normally, we think they are doing this on behalf of the insurer – so a complaint about the box and data will be against the insurer. In these cases we can still correspond with the box provider if they have permission from the insurer to handle the complaint – but the complaint will be set up against the insurer.
Some providers’ telematics terms and conditions say they are responsible for all aspects of the black box or app. In these cases, we may consider a complaint against them for problems with:
- the installation of the box
- the box once it’s been installed
- the app or the data it provides
However, the complaint will be against the insurer if it’s about:
- the policy being cancelled as a result of the telematics data
- how the data has affected the cost of the premium
Where responsibilities are split, we may sometimes need to set up two complaints – one against the broker or administrator and another against the insurer.
Handling a complaint like this
When you get a complaint about telematics insurance, you should reply to your customer within eight weeks.
If you don’t reply in time, or the customer disagrees with your response, they can complain to us. We’ll check if it’s something we can deal with, and if it is, we’ll investigate.
We’d expect you to show us that you’ve investigated the complaint thoroughly and that you have reflected carefully on the circumstances.
Find out more about how to resolve a complaint.
Information we will ask for when we receive a complaint
Once a complaint has been referred to us, we will ask financial businesses to provide information about their side of events.
The typical information we would normally expect to see about this type of complaint includes:
- policy schedule
- policy certificate
- full policy terms
- contact records
- driving data
We may ask for further information or documents, depending on the circumstances of the case.
Read more about how we handle complaints.
What we look at
As with every case, in reaching a decision about what’s fair and reasonable, we normally ask for information from both parties to help us work out what happened. This may include:
- the policy documents and key facts
- recordings of any sales calls
- screenshots from online sales
- an explanation of how the telematics scoring is calculated
- trip and cumulative data and scores
- records of cancellation warnings
Read more detail about what we look at for specific complaints:
In many of the complaints we see about telematics, the customer feels the system has recorded inaccurate data or unfair driving scores.
For example, they might have a low score for braking but feel they brake safely or smoothly. Or they might have a low score for speed, but feel they’ve been unfairly accused of breaking speed limits.
In these types of cases we’ll usually ask you to explain how you checked the data’s accuracy. This will include any system checks on the box or how you’ve checked the correct speed limit and vehicle location have been applied.
We’ll listen to your explanation of what has happened and we’ll check to see if we can spot any problems with the telematics data. We’ll look at the data behind the scores over time to see if we think the system is working correctly. To do this, we’ll need to see trip and cumulative data and scores.
We’ll also need an explanation of how the scores are calculated, including the weighting given to each driving behaviour. We understand this may be commercially sensitive, so we won’t share this information with the customer or any third parties.
If the terms allow it, we’ll usually say it’s fair for you to cancel a policy for low driving scores if:
- we feel the customer has been given a reasonable chance to improve their score
- we can’t see any problems with the data
If the customer is unhappy that their score has increased their premium mid-term, we’ll check the policy terms. We’ll want to see that you’ve applied any change to the premium fairly and in line with the terms. We’ll also check that:
- the rules for premium increases were clearly explained to the customer when they agreed to buy the policy
- the customer was given warnings and reasonable opportunity to improve their driving score
As with all mis-sale complaints, we’ll look at whether the information you gave to the customer during the sales process was clear, fair and not misleading.
We hear from people who feel they weren’t given clear enough information about the driving behaviours that are measured. They can also say they weren’t told of the impact of particular behaviours (like driving at night) on their score.
If the policy was recommended to a customer, we’ll check it was suitable for them. If it wasn’t, we’ll look at whether you gave them enough information to make an informed decision. We’ll check whether you explained:
- the key features of the policy and significant exclusions or limitations
- which driving behaviours would be measured
- which driving behaviours would have a significant impact on the score
- the possible consequences of a low score – for example, cancellation or increased cost
We’ll look at whether your actions affected what the customer did. We’ll check if you:
- made an unsuitable recommendation
- didn’t provide clear information
- misled the customer
We might decide the customer wouldn’t have done anything differently. Or we might decide they wouldn’t have bought the policy.
Putting things right
If we decide you’ve treated the customer unfairly, or have made a mistake, we’ll ask you to put things right. Our general approach is that the customer should be put back in the position they would have been in if the problem hadn’t happened. We may also ask you to compensate them for any distress or inconvenience they’ve experienced as a result of the problem.
The exact details of how we’ll ask you to put things right will depend on the nature of the complaint, and how the customer lost out. The following examples give an idea of our approach.
If the policy has been unfairly cancelled, we might ask you to:
- wipe any record of cancellation
- refund any cancellation fees or charges
- reimburse any extra the customer has had to pay for new insurance
If the premium has unfairly increased, we might ask you to refund what the customer has paid.
If we think the policy was mis-sold, we might ask you to:
- refund any set up or cancellation fees
- provide a pro-rata refund of the policy premium
- paying any extra costs incurred when arranging new cover
Consumer has policy cancelled after being recorded driving at 125mph
Motor Insurance Telematics Insurance
Consumer feels he wasn’t given enough information when buying his telematics policy
Motor Insurance Telematics Insurance
Business Support Hub
If you want to talk informally about a complaint you’ve received, you can speak to our Business Support Hub. Our Business Support Hub can give general information on how the Financial Ombudsman might look at a particular complaint. We also offer guidance on our rules and how we work.
Find out how to contact the Business Support Hub.