As an insurer, you may get complaints from customers when they’ve had their vehicle stolen but you feel you had valid reasons for not paying out on the claim.
When we investigate these complaints, we need to:
- explore your reasons for not paying the claim
- decide what’s fair and reasonable, based on the facts of the case
Types of complaint we see
We see several types of complaint around vehicle theft. As an insurance company, you may reject a claim because:
- you think the customer left the key in or around the vehicle when it was stolen
- a customer left a vehicle unattended (whilst unlocked or with the key in it).
- what happened is excluded by a clause in your policy
- a family member of the customer stole the vehicle, or took it without consent
Customers may come to us when they’re unhappy with you rejecting the claim. We need to investigate the facts of each individual case to decide if we think you’ve acted fairly and reasonably, or if we think you should pay their claim.
Handling a complaint like this
When you receive a complaint, you should reply to your customer within eight weeks. We only look at complaint that you've had a chance to look at first, so that you have the chance to put things right.
If you don't respond to them within the relevant time limits or they're not happy with your decision, they can bring their complaint to us. We’ll check it’s something we can deal with, and if it is, we’ll investigate.
We’ll expect you to be able 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.
What we look at
As with every case, in reaching a decision about what’s fair and reasonable, we consider:
- the relevant law and regulations
- any regulator’s rules and guidance that applied at the time
- any industry codes of conduct in force at the time
- what we consider was good industry practice at the time
If there are disagreements about the facts, we’ll make our decision about what probably happened using evidence provided by you, your customer and relevant third parties.
Read more detail about how we approach different types of complaints around vehicle theft:
We’ll need to make sure your investigation has considered all the circumstances. We’ll look at:
- whether the customer’s version of events to the insurer is consistent in how and when they reported the event to the police – and if the police treated it as a crime
- all reports, CCTV and witness statements, including any recommendations for further investigations
- whether the customer has provided you with all the keys for the vehicle and if not, why not
You may think a customer must have left their keys in the vehicle because there’s no obvious sign of a break-in. On the other hand, a customer tells us they didn’t leave their keys in the vehicle.
In these situations, we’ll ask:
- why you think they left the keys in the vehicle
- how the customer thinks their vehicle was stolen
Thefts don’t always involve keys
Even though there’s no obvious sign of a break in, we know this doesn’t always mean the customer left the key in the vehicle. So we’ll check you’ve fully explored other possibilities. For example, could the keys have been copied, stolen through a letterbox, or does the car have keyless entry?
We might ask you whether you’ve taken information from the engine control unit or ‘read’ the keys. This might show:
- whether another key has been programmed to use the vehicle
- which key was last used to drive the vehicle, and when
- faults already on the vehicle which might have made a thief get rid of it after stealing it
We’ll check if an engineer has inspected the vehicle in person or just looked at pictures. If you haven’t thoroughly inspected the vehicle, we may tell you to carry out a full inspection and then reconsider the claim.
Sometimes, a vehicle can’t be inspected because it’s been burnt out or has never been recovered.
If it’s burnt out, there’s unlikely to be any evidence whether a key was used or not. So we might say it’s unfair for you rely on an exclusion clause relating to keys. But this would depend on the circumstances of the individual case.
If a vehicle has never been recovered, we’ll look carefully at the evidence and possible reasons for it being stolen, and decide what’s most likely to have happened.
Your insurance policies may contain exclusion clauses which mean customers aren’t covered if they left the keys in or around the vehicle.
Customers may tell us they weren’t aware of the exclusion clause and they don’t think it’s fair for you to not pay out.
When we investigate these cases, we want to be sure that the seller of the policy clearly highlighted the exclusion when they sold it to the customer. We think this is a significant term as it could affect how the customer acted.
- whether the customer’s version of events is consistent in how and when they reported the event to the police – and if the police treated it as a crime
- all reports and witness statements, including any recommendations for further investigations
- whether the customer has provided you with all the keys for the vehicle and if not, why not
- check if the exclusion was mentioned in a summary, an insurance product information document (IPID) or key facts document
If we don’t think the term was sufficiently highlighted we look at whether the customer would have done anything differently if it had been. If we think they would have acted differently and not left their keys in the vehicle, it’s likely we’d say the seller of the policy should pay the claim.
We might also check the exclusion has been fairly applied. For example, if a customer knew about the exclusion but left their keys in their vehicle for a good reason, such as in an emergency, we might say it’s unfair for you to not pay out on the claim. If the keys being in the car wouldn’t have made any difference to whether the vehicle was stolen, we might say it’s unfair for you to rely on the exclusion.
You may believe that a customer left their vehicle unattended and for this reason, don’t think you should pay out on the claim. On the other hand, the customer is insisting they didn’t leave their vehicle unattended.
We’ll investigate the circumstances and ask for evidence such as CCTV footage and photos of the area. We’ll consider how close someone was to their vehicle – and whether they could have reasonably prevented it from being stolen.
If we think the customer was near enough to their vehicle to intervene or deter a thief, or had a good reason to leave it, we might tell you to pay the claim.
If the vehicle was on private land, we’ll ask questions such as whether the:
- vehicle was visible from a main road
- engine was running
- boot or doors were left open
If the vehicle wasn’t visible, we might decide it’s unfair for you to say it was unattended.
In public places, you may have a stronger case.
Sometimes we see cases where an owner was trying to sell their vehicle and a potential ‘buyer’ drove off with it and stole it.
Most insurance policies exclude claims involving theft by deception.
However, we sometimes decide the insurer has applied the definition of deception too strictly. For example, if the person stealing a car used violence or took a small window of opportunity to steal a vehicle, we might say that doesn’t count as deception as it’s more like car-jacking.
We might agree it’s fair for you to turn down a claim if we can see that someone has voluntarily given their keys and control of the vehicle to someone else. We’d also check what they did to minimise the risk. For example, if they let someone else test drive their car, did they stay in the vehicle and keep hold of the keys as much as possible or check the buyer’s driving licence or insurance documents?
If we think someone knew there was a risk their vehicle could be stolen, we’ll check what they did to minimise the risk. For example, if they let someone else test drive their car, did they stay in the vehicle and keep hold of the keys as much as possible or check the buyer’s driving licence or insurance documents?
If we don’t think someone did enough to reduce the risk, we might say it’s fair for you to turn down their claim.
We’ll also check whether, and how quickly, someone reported the theft to the police, as well as telling you. We’ll compare these different accounts and consider what’s most likely to have happened.
Most motor insurance policies have an exclusion that says people should take reasonable care to protect their vehicle from loss or damage. Sometimes insurers believe a customer didn’t do enough to prevent their vehicle being stolen, or that they acted recklessly.
We’ll ask you to explain why you think that the customer recognised there was a risk their vehicle could be stolen. And we’ll look into where, why and how the customer left it.
If we can see that a customer recognised there was a risk and didn’t do enough to reduce that risk, we’d need to consider if they acted recklessly.
If there’s no evidence to show the customer recognised the risk, we might decide they weren’t being reckless and that it’s unfair for you to apply the exclusion. However this might depend on whether we think they should have recognised the risk.
Your policies probably exclude loss or damage by theft or attempted theft if it’s carried out by a relative or other household member.
This is a common exclusion that we don’t think is significant. However, your policy may have an exception that says you’ll consider these claims if the customer agrees to cooperate with the police in investigating or prosecuting the relative or household member.
If the customer cooperates with the police but the police decide not to take any action, we’d normally expect you to pay out on the claim.
It’s possible that your policy doesn’t contain this exception, and you may have a blanket exclusion regardless of whether the customer cooperates with the police. We’d consider this unusual and would expect you to highlight it very clearly in a summary or key facts document within your policy. This is because the customer might have chosen a different policy if they’d known you weren’t going to cover them for this. If you hadn’t made this clear and we think the customer would have bought a different policy that would have covered this, we may well uphold the customer’s complaint.
In some cases, you may feel you don’t need to pay out on a claim because a relative took a vehicle without consent, rather than stealing it. However, we follow the law that taking a vehicle without consent is still theft and would expect you pay out on a valid claim.
You might say the claim shouldn’t be paid because the customer didn’t take reasonable care with their keys. We don’t usually think this is fair unless the family member who stole the vehicle has a known history for doing this. In this case, we might agree that the customer should have kept their keys more securely and may reject their complaint.
Some policies require a policyholder to comply with certain security conditions eg that a motorcycle should be kept in a garage overnight or that the steering lock should be engaged while parked.
We generally think these terms are reasonable, but you should adequately highlight them in the policy.
If you turn down a claim because a security condition hadn’t been met we might look at:
- any evidence you can provide about why you don’t think the condition has been met
- why you think the condition not being met made a difference to the theft
- what questions were asked when the policy was sold
- whether the security requirements were made clear in the policy documents
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.
For example, if we uphold the customer’s complaint, we’ll usually tell you to pay out on the claim. This means you’d pay what the car would have been worth on the day it was stolen.
We may also ask you to pay interest on top of this compensation. We calculate the interest from the date of the theft to the date you actually pay compensation to the customer. We’ll usually tell you to use a rate of 8% simple. This means it isn’t compounded annually.
If the customer feels you’ve handled the case poorly, we’ll also look at whether they have valid points. If so, we may tell you to pay the customer compensation for the distress or inconvenience they’ve experienced. If the customer has been without a vehicle longer than they should have been we might also ask you to compensate them for its loss of use.
Find out more about how we award compensation.
An insurer doesn’t make their exclusions clear enough
A consumer doesn’t do enough to prevent his car being stolen
A consumer leaves his car running and unattended
An insurer is wrong about keys being left in a car
A consumer’s car is stolen by deception
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 ombudsman might look at a particular complaint. The Business Support Hub can also offer guidance on our rules and how we work.