DRN-6006004

The complaint Mr T complains about the cancellation of his motor insurance policy by Aviva Insurance Limited (Aviva) due to non-payment of his premium finance instalments. Any reference to Aviva in this decision includes their agents. What happened Mr T’s motor insurance policy renewed with Aviva on 26 June 2025, at a total cost (including a charge for credit, as Mr T elected to pay monthly for the policy through direct debit) of £2,176.04 for the year. The first payment for the new policy was due on 26 June 2025 for £181.30 and then on the first of every month for £181.34 (from 1 July 2025 until May 2026). In August 2025, Aviva cancelled the policy, it said it had failed to collect a monthly direct debit from Mr T’s account in July 2025. Aviva said it had sent emails, letters and SMS messages in July 2025 to Mr T advising him of the non-collection of the premium and subsequently that his policy would be cancelled if payment wasn’t received by 7 August 2025. Payment wasn’t received, so Aviva cancelled the policy. Mr T complained to Aviva, asking it to reinstate his policy as he had paid a premium to avoid cancellation. Aviva acknowledged that its communications could’ve been clearer and offered £100 and agreed to waive the outstanding balance of £58.54. It didn’t agree to reinstate the policy, saying it had followed its process of cancellation. It said it applied for the monthly premium payment in July 2025, but the payment wasn’t successful. Aviva said it sent default letters and emails of the missed payment and further communications by text and email letting Mr T know the policy had an outstanding premium that needed to be paid before 7 August 2025. Mr T remained dissatisfied and bought his complaint to this Service. Mr T provided an email he received the evening before his policy was cancelled. This confirmed that the remaining premiums would be spread over the remaining nine months. Mr T said because of this, he didn’t make a payment. Our Investigator didn’t uphold the complaint. They said they were satisfied Aviva had acted in line with the terms of the policy. They thought Aviva’s offer of compensation of waiving the outstanding balance and £100 compensation was appropriate. Mr T didn’t agree, so his complaint has been passed to me to make a decision. I issued a provisional decision and upheld Mr T’s complaint as follows: I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I want to acknowledge I’ve summarised Mr T’s complaint in less detail than he’s presented it.

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I’ve not commented on every point he has raised. Instead, I’ve focussed on what I consider to be the key points I need to think about. I mean no discourtesy by this, but it simply reflects the informal nature of this Service. My role here is to decide whether Aviva have acted fairly towards Mr T. Our Service can only consider a complaint once a financial business has had an opportunity to respond to it. Therefore, my decision will only consider the cancellation of the policy in August 2025. I recognise Mr K has said he’s unhappy with Aviva’s actions regarding his previous policy being cancelled several times. But he’ll need to raise this with Aviva directly first. The key issue in Mr T’s complaint is Aviva cancelling the policy based on non-payment of a policy premium finance instalments in July 2025 (by monthly direct debit). Having carefully considered Mr T’s evidence, I don’t think Aviva has been fair in cancelling Mr T’s policy. Aviva sent Mr T an email on the evening before the policy was due to be cancelled. The email confirmed “the remaining balance £1,978.22” (which appears to have included July's outstanding payment) was going to be spread over the remaining nine monthly payments. From the email Mr T received I can see why he didn't contact Aviva to make a payment, as it had been agreed that the amount outstanding would be spread over nine monthly payments. I don’t think Aviva have been fair in cancelling Mr T’s policy because I think Mr T was reassured the outstanding premiums would be spread over the term, this was after the default notice was sent. I’ve thought carefully what Aviva needs to do to put things right. I’ve asked Mr T to provide evidence of his new insurance premiums. Mr T has said he has been unable to obtain any insurance following the cancellation of his policy. But he hasn’t provided me with any evidence when I’ve asked him twice to provide it. So I can’t say he has been caused any financial detriment because of the cancellation. I think the fair outcome here is that Aviva removes any records of its policy cancellation from its records and any external databases it’s updated. It needs to write to Mr T and tell him it’s done this and confirm that he doesn’t need to tell other insurers about this in the future. Mr T has been caused some distress and inconvenience by Aviva’s actions. I’ve thought about this and considered this service’s guidelines on compensation, and I think the amount Aviva has already offered of £100 is adequate and its agreement to waive the outstanding balance of £58.54 is fair. So, I require Aviva to pay this, if it hasn’t already done so My provisional decision For the reasons explained, but subject to any further information I receive, I intend to uphold this complaint and require Aviva Insurance Limited to do the following: • Remove the cancellation marker from its records and any external databases it’s updated. It needs to write to Mr T and tell him it’s done this and confirm that he doesn’t need to tell other insurers about this in the future. • Pay £100 compensation to Mr T for the distress and inconvenience it caused, if it hasn’t already done so. Responses to my provisional decision

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I invited both Aviva and Mr T to respond to my provisional decision. Aviva accepted the provisional decision. Mr T didn’t respond. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, as Mr T didn’t respond to say whether he accepted or rejected my provisional decision, I see no reason to reach a different conclusion. So this final decision confirms the findings set out in my provisional decision that I uphold Mr T’s complaint. My final decision For the reasons I’ve given above, I uphold Mr Ts complaint and direct Aviva Insurance Limited to do the following: • Remove the cancellation marker from its records and any external databases it’s updated. It needs to write to Mr T and tell him it’s done this and confirm that he doesn’t need to tell other insurers about this in the future. • Pay £100 compensation to Mr T for the distress and inconvenience it caused, if it hasn’t already done so. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr T to accept or reject my decision before 26 May 2026. Lorraine Ball Ombudsman

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