Car Decision Reference 2020-0200

Case OutcomeUpheld
Subject MatterCar
Date18 May 2020
Conducts Complained OfLapse/cancellation of policy,Rejection of claim
Finantial SectorInsurance
Decision Ref:
Product / Service:
Conduct(s) complained of:
Lapse/cancellation of policy
Rejection of claim
The complaint concerns the Provider’s cancellation of a Motor Insurance Policy because of
the Complainant’s alleged non payment of premium instalments. The Complainant was
involved in a car accident in June 2016. The Complainant advised the Provider of the
accident, but the Provider refused to cover the claim on the basis that the policy had
lapsed due to non payment of premiums. The Provider states that it had issued
correspondence to the Complainant in May 2016, advising him to pay the outstanding
premium amount. The Complainant advises he received no such correspondence.
The complaint is that the Provider incorrectly cancelled the insurance policy and
incorrectly refused to deal with the claim resulting from the Complainant’s accident with a
third party.
The Complainant’s Case
It is the Complainant’s position that he took out car insurance with the Provider in 2016.
He paid a €300 deposit on 13 April 2016, with the remainder to be paid by Direct Debit.
The Complainant states that no documentation was received from the Provider to set up
the Direct Debit.
The Complainant states that he informed the Provider of a Road Traffic Accident that he
was involved in, on 22 June 2016, and states that he was only then advised that his policy
had been cancelled.
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The Complainant submits that at no stage in advance of this was he informed of any issue
with his insurance policy.
The Complainant says that he never received a reminder letter, nor a cancellation letter as
referred to by the Provider. The Complainant states that on the date the registered letter
was allegedly signed for, he was at work. The Complainant states that there was no one at
the house to accept the post.
The Complainant submits that he received conflicting letters from the Provider after the
cancellation, and received a refund of €112.00. The Complainant considers that the
€112.00 payment would have covered the May 2016 premium.
The Complainant states that the mode of payment was not well explained to him at the
time he took the policy out. The Complainant says that he was expecting the Provider to
send him the Authorisation Letter of Direct Debit to his bank as it had done previously
when he took out an insurance policy with the Provider some years earlier, before
changing to another Provider. The Complainant submits that he thought the same method
of payment would apply and he was awaiting the Provider’s instruction.
The Complainant states that he wants his car insurance cover to be re-instated and he
wants the Provider to cover the claim arising from the road traffic accident that occurred
on 22 June 2016.
The Provider’s Case
A Summary of the Complaint and a Schedule of Questions was issued to the
Provider by this office. The following are the Provider’s responses:
In response to whether the Provider accepts that the Complainant agreed to pay the
premium for the period of insurance, the Provider states:
“No. In circumstances where [the Provider] sent the insured Bank Giro credit forms
and followed its procedures in writing to the address they had on record for the
insured to include a registered post letter on this matter [the Provider] is entitled to
conclude that the insured was not agreeing to pay the premium for the period of
insurance as he took no positive steps to do so himself from the date of inception of
the policy. [The Provider] is satisfied that it's process in dealing with non-payments
goes beyond what is required legally as set out below and for an insured to benefit
from the indemnity of a contract they must accept primary responsibility for
payment of the insurance premium on the agreed terms. To find otherwise would
expose insurers to risks in all such policies where payment has lapsed for whatever
reason and impose an obligation on insurers that the Irish High Court would not
impose on them.
If the FSPO accepts that the insured for whatever reason did not receive any of the
correspondence that [the Provider] states it sent to the address for the insured he

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