A consumer complains after finding his car insurance had been stopped without his knowledge

Motor Insurance Distress and inconvenience Up to £5,000

A system error meant Harry's car insurance was cancelled. He only found out after the police stopped him, and he was then convicted in court. Whilst his insurer admitted its mistakes and offered to cover the costs incurred, we didn't think it had considered the stress Harry suffered and worry he'd continue to have.

What happened

Harry was stopped by the police for driving without insurance, while he had his mother and father in law in the car. He was surprised as he always automatically renewed his insurance each year and hadn’t been aware there was a problem. He contacted his insurer who confirmed he was no longer insured with them, and that it would need time to investigate what had happened. Harry organised onward travel for both him and his in laws that evening, as his car was impounded by the police and he had to pay £300 to have it released. He said the experience caused him a lot of distress and embarrassment.

Harry notified his insurer that he had a court date in three weeks’ time, but it took his insurer four weeks to investigate – despite his calls to chase. Harry attended court and was convicted of driving without insurance (IN10) and received a £300 fine.

When the insurer looked into why his policy had been cancelled it realised there had been a system error and payment hadn’t been taken – so it provided Harry with a new policy at the same price as his policy should have renewed at straight away. The insurer also apologised for the initial error of cancelling the insurance, and the delay in investigating the cause. It offered to cover all his costs, including paying the £300 impound fee and £300 fine. It also offered £500 compensation for the distress and inconvenience Harry had experienced – but Harry didn’t think that was enough and so asked us to investigate.

What we said

We thought it was fair that the insurer covered all of the financial losses Harry had incurred. We also calculated a figure for financial loss that compensated Harry for the extra amount he’d most likely have to pay for his insurance policy in the years to come – and asked the insurer to pay that on top of the fees and fine he’d incurred.

But we didn’t think the offer of £500 was enough to make up for the distress and inconvenience the insurer had caused. We were satisfied that being pulled over by the police would have been very worrying, and a highly embarrassing thing to happen while he had his in- laws in the car. There was also the inconvenience of arranging travel for everyone once the car was impounded. Harry showed us that he’d chased the insurer several times ahead of his court date, and that he was very concerned during the whole period about what implications the conviction might have for his job and future insurance costs.

He explained how distressing it was to have to attend court, and to be convicted. He also explained that while his employer was very understanding about the conviction and it had not affected his job, he was very embarrassed about it and had the worry of it being on his record for a long time. He didn’t know if he’d want or have to change jobs at some point and how it might affect him. And he also didn’t know how it might affect his ability to hire cars for holidays or other reasons.

Overall we were persuaded that the insurer’s actions had a substantial impact on Harry, and caused him significant amounts of worry, distress, inconvenience and damage to reputation. Taking account of the likely ongoing impact this would have on him, we asked the insurer to pay Harry £2,500 compensation.