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ombudsman news

issue 120

September 2014

motor insurance - theft claims

Aside from PPI, we see more complaints about car and motorcycle insurance than any other type of insurance. And cases involving theft or attempted theft make up a large part of these.

According to police figures, car thefts in the UK have fallen considerably - from 378,000 in 1997 to 90,000 in 2013. But over the past few years, the number of contested claims reaching us has been relatively steady. During that time, we’ve decided in around four in every ten cases that a claim has been wrongly rejected.

If someone tells us their theft claim has been unfairly turned down, we’ll look at the exclusion the insurer is relying on - and whether the insurer has shown it applies. We’ll also consider whether the exclusion was drawn to the consumer’s attention.

Nearly all motor insurance policies exclude cover for theft if the keys were left in or on the vehicle, or if the vehicle was left unlocked and unattended. But in the cases we see, what “unattended” means is often called into question.

When we’re making our decision, we’ll take into account the Court of Appeal’s judgment in Hayward v Norwich Union. So we might decide that a car was “attended” even if the driver wasn’t in it - as long as they were close enough that their presence would be likely to deter a thief.

And we might say it isn’t reasonable to apply an exclusion in exceptional circumstances - for example, an emergency - where leaving their car unattended isn’t the driver’s most pressing concern.

An insurer might tell us that their customer has been “reckless” - that is, they knew there was a risk their vehicle could be stolen, but they didn’t take sufficient steps to protect it. But this can be difficult to show. And in many cases, while we might agree someone’s been careless, we don’t agree they were “reckless”. In these cases, we tell the insurer to pay the claim.

issue 120 index of case studies

  • 120/8 - consumer complains when insurer rejects claim because keys were left in car
  • 120/9 - consumers complain that insurer has rejected theft claim because car was left unattended on driveway
  • 120/10 - consumer complains that insurer has rejected theft claim because car keys were left in coat pocket
  • 120/11 - consumer complains that insurer has rejected claim because locks weren't changed when keys were stolen
  • 120/12 - consumer complains that insurer has rejected claim - saying car couldn't have been stolen without key
  • 120/13 - consumer complains after business rejected claim on grounds that his key must have been used in theft
  • 120/14 - consumer complains about rejected claim after his van is stolen

consumer complains when insurer rejects claim because keys were left in car

Miss V worked as a care assistant. Unfortunately, while she was helping a client one evening, her car was stolen from where she’d parked it outside the client’s house.

Miss V made a claim on her car insurance. But the insurer wouldn’t pay out - saying their insurance policies excluded theft claims where the keys had been left in the car. It appeared that the thief had smashed the car window - and driven away using a key which they’d found on a bigger bunch that Miss V had left in the car.

Miss V complained about the insurer’s decision. She accepted that she’d left a car key inside the car. But she explained that she’d locked the car, and the bunch of keys wasn’t on show - it had been covered by some aprons underneath the passenger seat. She said that, in any case, this was the first she’d heard about the exclusion in question - and she thought she should have been told about it earlier.

However, the insurer told Miss V she had been “reckless” - and wouldn’t change their mind. Frustrated, she asked us to step in.

complaint upheld
We needed to establish whether the “keys in car” exclusion had been drawn to Miss V’s attention - and whether she had been “reckless”.

First, we asked Miss V to explain how the policy was sold to her. She told us that she’d taken it out over the phone - and that the person she’d spoken to hadn’t said anything about the exclusion. She said that because there was a charge to send the policy documents by post, she’d agreed they could be emailed to her instead.

We asked the insurer to provide a recording of the call, and a copy of any emails that had been sent to Miss V. We found that, as Miss V had remembered, the person she’d spoken to at the insurance company hadn’t mentioned the exclusion at all. Neither had the documents that she’d been sent by email.

The insurer told us that the exclusion was set out in the full policy document, which was available to customers on their website. However, this document hadn’t been sent to Miss V - and in any case, it was more than twenty pages long. In our view, such an important exclusion should have been made much clearer.

Because Miss V used her own car to visit her clients, she had insured it for business as well as personal use. Looking at the emails between the insurer and Miss V, we saw that the insurer had originally missed off the business cover - and she’d contacted them to make sure it was added.

This indicated that Miss V had read the information she was sent about the cover. We thought that if she’d received clear information about the exclusion, she would have taken note of it - and would have thought twice about leaving her bunch of keys in the car.

To agree that Miss V had been “reckless”, we needed to decide whether she’d recognised the risk posed by leaving the keys behind - but had gone ahead anyway, without taking reasonable steps to protect her car.

There wasn’t any dispute that Miss V had locked the car. And she hadn’t left the keys in the ignition or on a seat where they would have been visible. They had been covered by aprons, which themselves wouldn’t have attracted prospective thieves. While we accepted Miss V might have been careless, we didn’t think that she had been “reckless”.

In the circumstances, we told the insurer to meet Miss V’s claim.

consumers complain that insurer has rejected theft claim because car was left unattended on driveway

Mr and Mrs G kept their two cars parked on their driveway. One January morning, as they were de-icing their cars with the keys in the ignition and the engines running, thieves drove away with both cars.

Mr and Mrs G immediately reported the theft to the police - and then claimed on their car insurance. But the insurer said they wouldn’t pay out for theft if a car had been left unattended with the keys inside.

Mr and Mrs G complained. They said they hadn’t left their cars unattended - as Mrs G had been in the porch at the time. And they didn’t think the insurer had told them about the “keys in car” exclusion anyway.

However, the insurer pointed to Mrs G’s police statement, where she’d said she was in the kitchen and Mr G was upstairs when the cars were stolen. The insurer also said that the exclusion was clearly mentioned in the paperwork that Mr and Mrs G would have received during the sales process.

Feeling they’d reached a deadlock - and fed up with relying on colleagues for lifts to work - Mr and Mrs G referred the complaint to us.

complaint not upheld

It wasn’t clear what had happened on the morning the cars were stolen. So we needed to decide what was most likely to have happened.

We confirmed that Mrs G had told the police that both she and her husband had been inside the house when the cars were stolen. We appreciated that she’d been very shaken up when she made the police statement - and she was now remembering things differently. But it seemed to us that the version of events she’d given immediately after the theft would have probably been the more accurate.

We were also sent photos of the driveway - and noted that the porch was very close to where the cars had been parked. So we thought that if Mrs G had been in the porch, prospective thieves would have been put off.

In light of this, we decided that Mr and Mrs G had most likely been inside the house - and had left their cars unattended with the keys in the ignition.

But we still had to consider whether Mr and Mrs G had been made aware of the “keys in cars” exclusion. We asked the insurer for a copy of the information that Mr and Mrs G were sent when they took out the policy. In our view, the exclusion was prominent in the policy booklet. And it was clearly set out in the short key facts document that Mr and Mrs G had been given.

We were very sorry to hear what had happened to Mr and Mrs G. But we explained that, based on what we’d seen, we thought the insurer had acted fairly. We didn’t uphold their complaint.

consumer complains that insurer has rejected theft claim because car keys were left in coat pocket

Mr B went out one Friday evening to celebrate a friend’s birthday. He parked outside his friend’s house - where he’d arranged to meet up with a larger group - and had a few drinks in the garden before they all set off on foot to the local pub.

Unfortunately, when Mr B came back to pick up his car on Sunday, it was gone. He phoned the police to report the car as stolen, and later made a claim on his car insurance. He explained to the insurer that he’d locked his car- but now realised that he’d put the keys in the pocket of his jacket, which he’d left over the back of a chair in his friend’s garden.

The insurer wasn’t impressed with Mr B’s explanation. They said it was a condition of his cover that he should “take all reasonable steps” to protect his car from loss or damage. In the insurer’s view, Mr B hadn’t done this - and his actions had been “reckless”.

Although Mr B asked the insurer to reconsider, they refused to pay out. So he asked us to step in.

complaint upheld

We acknowledged that the insurer felt Mr B had put his car at risk by leaving the keys behind in his jacket. But for us to decide he’d been “reckless” - and that the claim shouldn’t be paid - they would need to show he’d been aware of the risk.

We asked the insurer for recordings of the calls between Mr B and their claims handlers, and for a copy of his claim form. We also asked Mr B some questions over the phone about what had happened.

From the accounts Mr B had given, it appeared he hadn’t thought to check at any point over the weekend that his car was safe - and he’d only turned up to collect it on Sunday.

He hadn’t asked anyone to keep an eye on his jacket. Nor had he tried to put it somewhere less visible. If he’d done any of these things, that might have suggested he knew there was a risk that the keys might be taken. Given Mr B had left the jacket in the garden of a friend, we could understand that he hadn’t been particularly worried.

We agreed that leaving car keys in an unattended jacket wasn’t a very sensible thing to do - and would increase the risk of the car being stolen. But putting together all the information we had, we didn’t think Mr B had recognised that risk.

In light of this, we didn’t agree Mr B had been “reckless” - and we told the insurer to meet his claim.

consumer complains that insurer has rejected claim because locks weren't changed when keys were stolen

Mrs L’s car was stolen from outside her house, but it was found the next day and returned to her. The driver’s window had been smashed, and she had it repaired at her local garage.

It was a couple of days after the car had been repaired - when her daughter, back from university, asked to borrow it - that Mrs L realised the spare keys were missing. But she didn’t book the car in to have the locks reprogrammed straight away. Instead, she decided to park the car in different places a short way from her house until the locks were sorted out.

After a week, Mrs L’s car was stolen again - and this time it wasn’t found. When she made a claim on her car insurance, the insurer wouldn’t pay out. They said with the keys missing, the car was clearly at risk of being stolen - and Mrs L hadn’t taken “reasonable steps” to protect it.

Although Mrs L asked the insurer to reconsider, they wouldn’t change their mind - so she contacted us.

complaint not upheld

It was clear from the way Mrs L had parked in different places that she’d realised her car was at risk of being stolen. We needed to decide whether, knowing about the risk, she’d gone far enough to protect her car.

Mrs L told us that she’d phoned round several local garages about getting her car’s locks reprogrammed - but hadn’t been able to book it in immediately. However, when we asked the insurer for records of the contact they’d had with Mrs L, we found she’d told their claim investigator that she hadn’t had time to phone any garages.

It wasn’t clear what had actually happened. But in our view, even if Mrs L had phoned the garages, she could have taken the next available appointment - rather than not making any arrangement at all.

Mrs L said she’d phoned the insurer when she realised the keys were missing. She felt they should have been more helpful and given her some practical advice about how to keep her car safe.

But according to the insurer’s records, Mrs L hadn’t phoned the insurer until her car was stolen for the second time. And even if she had phoned when she said, we didn’t think the insurer would have told her anything that she didn’t already know - that the locks would need to be reprogrammed, and that the car should be kept secure in the meantime.

We asked Mrs L what steps she’d taken to protect her car while she was waiting for the locks to be sorted out. She said she’d phoned the council to ask whether they had a lock-up to rent, but none were available - so she’d decided just to keep moving the car around.

Given Mrs L’s car had already been stolen once - probably with the same missing keys - we thought she could have done more. For example, she hadn’t used a crook lock, or made enquiries about renting a garage once she knew the council couldn’t help.

We were sorry that Mrs L was having to deal with the situation. But we agreed with the insurer that she hadn’t done enough to keep her car safe - so we didn’t uphold her complaint.

consumer complains that insurer has rejected claim - saying car couldn't have been stolen without key

One evening, Miss A’s car went missing from where she’d parked it outside a friend’s flat. It was found a week later a few miles away - with a damaged front door and bonnet.

Miss A had already told the police her car had been stolen. And after she’d picked up the car from the garage that had been holding it, she phoned her car insurer to make a claim.

The insurer said they’d need to look into what had happened before agreeing to pay out. Over the next few weeks, they asked Miss A questions over the phone and carried out their own investigation.

Eventually, they wrote to Miss A to say they weren’t willing to meet the claim. They said they’d received evidence from a third party that her car had crashed into another vehicle - and that the third party’s account of the collision was consistent with the damage to Miss A’s car. The third party had taken a photo of a male driver running away after the crash.

According to the insurer, it would have been almost impossible for someone to drive Miss A’s car away without one of the two keys it had been sold with. And because the two sets of keys had always been in Miss A’s possession, they weren’t convinced things had happened exactly as she’d said.

Miss A complained - saying she’d heard that cars could now be stolen without any keys. But the insurer said that only high-value vehicles were being targeted in this way - so it was highly unlikely in Miss A’s case.

Upset at the suggestion she’d somehow been involved, Miss A asked us to step in.

complaint upheld

We asked the insurer for the evidence they’d used to make their decision. The paperwork they sent us included photos of the damage to the car and a report by an “independent security analyst”.

We read the report very carefully. It explained that the immobilisation technology involved meant it was extremely difficult for cars like Miss A’s to be stolen without a programmed key. It would be a very complicated and noisy process - which a thief wouldn’t even try, because passers-by would be sure to notice.

But we weren’t convinced by the analyst’s view. We explained to the insurer that we have regular conversations with security specialists - so we can make sure we’re reaching fair, informed decisions in cases like Miss A’s.

We know that it’s not only high-value cars that are being stolen without their programmed keys - and that the process can be relatively quick. Looking at the photos of the damage, we saw the driver’s window had been smashed. We didn’t see why someone with a key would have broken into the car in this way.

We pointed out to the insurer that if they were implying Miss A hadn’t told the truth - and that the driver had been using one of her two programmed keys - then they needed to prove it.

But nothing we’d seen had done so - or made us doubt what Miss A had said. We noted that the police hadn’t raised any concerns about Miss A’s version of events. And neither had the claims handler who’d interviewed Miss A over the phone.

In the circumstances, we told the insurer to meet Miss A’s claim. We also told them to pay her £500 to reflect the inconvenience of the long delay in paying her claim, and the upset and embarrassment they’d caused by suggesting she’d been involved in the incident.

consumer complains after business rejected claim on grounds that his key must have been used in theft

Mr N hired a motor home for two weeks’ holiday abroad with his family. He left a key to his house with his neighbour so she could feed his cat. But when he got back, Mr N discovered that his car had been stolen from his driveway. He immediately phoned the police and his insurer to try to sort things out.

After about a week, the police tracked down his car. It had been burnt out, left about ten miles from Mr N’s house.

The insurer sent someone to inspect the car, and asked Mr N a few questions. They wanted to know how many keys the car had come with. Mr N said there had been two, and sent them to the insurer as proof.

The insurer’s representative said that the car hadn’t sustained any “theft-related” damage. They said that it was likely that a key had been used to take the car.

But Mr N said there were no signs that his house had been broken into, and both keys had been in the house while he was on holiday. He said the only person with access to his house was his neighbour - a family friend in her eighties. The insurer agreed that they didn’t think Mr N’s neighbour was likely to be involved.

The insurer was adamant that a key must have been used in the theft - so rejected Mr N’s claim. They said that it would have been very difficult not to damage the car if a key hadn’t been used. And they said that a thief was unlikely to go to such lengths only to burn out the car.

Mr N complained. He said that he needed the claim to be paid as he was having to take public transport to get around, and was having to allow far more time for journeys than usual. But the insurer stuck to their decision - so Mr N approached us to see if we could help.

complaint upheld

When we checked with the police, they said that there was nothing suspicious about Mr N’s circumstances or testimony. They also confirmed that Mr N’s house hadn’t been broken into.

So we asked the insurer for the information from their investigation. They said that the theft report they’d commissioned said that the car couldn’t have been stolen without a key. When we asked what else they’d assessed to reject the claim, the insurer repeated that they thought it was unlikely that the car would have been stolen just to burn it out.

As far as we could see, there was no evidence to suggest that a key had been used. And when we consulted motor security experts, they said that Mr N’s car had a “two-star” security rating. Even cars with a five-star rating can be stolen quickly without using a key - so we thought it was likely that Mr N’s car could have been taken without one too.

There are many devices that can be used to take a car without using a key. So we thought that the insurer was rejecting Mr N’s claim based largely on guesswork.

Taking all these facts together, we decided that Mr N’s car was likely to have been stolen without a key. And so we took the view that it wasn’t fair for the insurer to turn down his claim.

We told the insurer to pay Mr N the value of the car, plus interest. We also told them to pay him £400 for being unable to use his car for a considerable time, and to compensate him for the inconvenience he’d been caused.

consumer complains about rejected claim after his van is stolen

Mr Z had a van which he kept on his driveway. One morning, when he was leaving the house to go to work, he was shocked to find that his van had been stolen overnight. He immediately phoned the police and his insurer to report the theft.

The police investigated the theft, but couldn’t track down the stolen van. Meanwhile the insurer had already started their own investigation. As part of it, they asked Mr Z to provide “any and all keys” that he had for the van.

Mr Z sent one key to the insurer - saying that it was the only one he’d ever had for the van. As the key was electric, the insurer asked a specialist to confirm that it was genuine.

When the specialist reported back, they said there were a couple of things that they felt were suspicious. Apparently, the key Mr Z had sent to the insurer was made three years after the van itself. The specialist also said that the key’s blade didn’t match the locks that Mr Z’s type of van would have - and the electronic chip within the key was missing.

The third party said that the key supplied wouldn’t even have been able to open the van’s doors - let alone start the engine.

The insurer passed on these findings to Mr Z, saying that they didn’t think he’d supplied them with the right key. They said that they also had proof that the van had been supplied with two keys when Mr Z had bought it. This led them to believe that two keys for the van were unaccounted for. So they turned down the claim.

Mr Z complained. He said that this was the original key he was given with the van. He suggested that perhaps the chip had “fallen out” - or that the key had been tampered with by the third party.

The insurer disagreed with Mr Z - repeating the findings of the report they had. They said that the van was most likely taken with an original key.

As the insurer and Mr Z couldn’t agree, Mr Z decided to see if we could help.

complaint not upheld

We asked the insurer to share with us the report that they’d commissioned. And when they did, we could see why they had cause for suspicion.

The report set out clearly the differences between the key that Mr Z’s van would have been supplied with, and the key that he’d sent the insurer. Significantly, it showed that in order for the chip to be tampered with or removed, the blade of the key would have to be taken off. So it seemed very unlikely that the chip would have just “fallen out” as Mr Z suggested.

The chip “talks” to the engine of a vehicle, disabling the immobiliser. So without the correct chip, Mr Z’s van wouldn’t start. This suggested that Mr Z hadn’t provided the right key.

The insurer also showed us evidence from the van’s manufacturer that their vans always had two keys supplied. We could see nothing out of the ordinary with this.

In the circumstances, we told Mr Z that we thought the insurer’s decision was reasonable. We didn’t uphold his complaint.

image: ombudsman news

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.