DRN-6313563

The complaint Mr T complains about the service provided by Saga Services Limited (‘Saga’), an insurance intermediary. He says that Saga failed to give him sufficient notice that a non-fault claim would affect his premium, which led him to cancel his policy and take out more expensive cover because he didn’t have time to shop around. What happened Mr T had taken out a policy through Saga with underwriter C which was coming up for renewal in October 2025. A few weeks before the policy was due to expire, Mr T was involved in a non-fault accident. Mr T informed Saga about the accident but he said that the other party’s insurer who was also C admitted liability and told Mr T he could deal with it directly and not through his own policy which Mr T agreed to do. Two days later, Saga wrote to Mr T to say that his renewal premium was £186.37 with a different insurer. Mr T called Saga and said that he was told by the third-party insurer that even if he dealt with it directly this could impact his premium when his policy renewed. The adviser he spoke to ultimately said that if he didn’t claim through his own policy the renewal premium which Mr T had already received, wouldn’t be impacted. On 6 October 2025, the day before the policy was due to renew, Saga wrote to Mr T and said that there would be an additional premium of £87.63 due to the accident. Mr T said he didn’t receive this communication until after the policy renewed and by which point the £87.63 had already been taken from his bank card. Mr T contacted Saga and was told that, although he hadn’t claimed on his own policy, the incident was still treated as a claim and would need to be declared. Mr T was unhappy about this and said he didn’t understand why his premium had increased when his own insurer hadn’t paid anything under the policy. The adviser explained that policy pricing is determined by the underwriter, not Saga. The adviser also said the claim had been recorded as a “fault” rather than a “non-fault” claim. Mr T confirmed that he wished to raise a complaint. He was told this could take up to eight weeks to be resolved, which he was also unhappy about, and said he was considering cancelling his policy — something he later did. Saga considered Mr T’s complaint and upheld it in part. It agreed that the advice given by the handler who said that the claim wouldn’t impact Mr T’s renewal premium was incorrect and said that they were being provided with more training. Saga also confirmed that the

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claim had been logged as a “fault” claim but couldn’t confirm whether this was done by the third-party insurer or itself. It said it changed it to a “non-fault” claim and this resulted in a total premium of £228.42 which meant an additional premium of £45.52 instead of the £87.63 previously quoted. It also accepted that taking out the £87.63 from Mr T’s account was wrong. It paid Mr T a total of £175 in compensation including £50 for charging the wrong premium and agreed to refund the £30 cancellation fee it had charged. Mr T didn’t consider the compensation offered to be adequate and brought his complaint to our service. In addition to the points already raised with Saga he also said that he was promised a call from a manager which he never received. One of our investigators reviewed the complaint and thought the compensation offered by Saga was fair and reasonable in the circumstances. Mr T didn’t agree and asked for an ombudsman’s decision. He said that he wasn’t given enough time to “shop around” for another policy and ended up with a more expensive policy which also had a higher excess. He also thought that it was Saga who initially recorded the claim as a “fault” claim internally as he had confirmation that, at that point, the claim had not yet been added on any external databases by the third-party insurer. The matter was then passed to me to decide. 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. I appreciate Mr T feels very strongly that he was treated unfairly by Saga and has raised a number of points. I’d like to reassure him that I’ve considered everything he’s said, but I will focus on the points I consider most relevant to my decision. No discourtesy is intended by this. We aim for our decisions to be as concise and to the point as possible. The renewal quote and timing of the accident Mr T says Saga didn’t give him enough time to shop around for alternative cover. The accident occurred two days before he received his renewal quote, and it appears the accident wasn’t taken into account when that quote was generated. When it was later taken into account, the premium increased. I appreciate this left Mr T with little time to shop around and caused frustration. However, the accident effectively coincided with the renewal process and limited Saga’s opportunity to update its records before issuing the initial quote. Ideally, the accident would have been included from the outset, but I can understand why the original quote didn’t reflect it given the timing. Should the accident affect the premium? Mr T doesn’t think the accident should have affected his premium because he didn’t claim on his own policy. As Saga explained, it’s for the underwriter to decide how policies are priced

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and how risk is assessed. Most insurers require customers to declare any incidents, regardless of fault, usually covering the previous five years. As the accident occurred before renewal, it was relevant to the underwriter’s assessment. The increased premium reflects how the underwriter assesses future risk, rather than whether a payout was made under Mr T’s policy. Saga, as an intermediary, doesn’t set premiums or determine underwriting criteria so I don’t think it had any control over the additional premium. Incorrect recording of the claim Saga accepts the additional premium of £87.63 was incorrect and should have been £45.52, as the claim was wrongly recorded as a “fault” claim. Mr T has provided evidence from the third-party insurer confirming liability was admitted early on, and I’m persuaded this was a non-fault claim. Saga couldn’t confirm whether it or the third-party insurer made this error. However, the third-party insurer had no reason to notify Saga, as it was dealing with Mr T directly, and Mr T says the accident wasn’t recorded on external databases at that time. Given this, I think the error was more likely Saga’s. Saga refunded £50 for this issue, which exceeded the actual premium difference, and I consider that fair and reasonable. Nevertheless, Saga also took the additional premium from Mr T’s account without his approval. I consider this poor service. Incorrect advice by Saga Saga accepts that an adviser incorrectly told Mr T that his previously quoted renewal premium wouldn’t change. I’ve listened to the relevant call. For most of the conversation, the adviser explained that an incident could affect premiums, said no claim was recorded at that point, and offered to check the impact with the underwriter. However, at the end of the call, when Mr T asked for a guarantee, the adviser gave incorrect advice. It’s unclear why she changed her position, especially as it contradicted earlier explanations and advice Mr T had received from the third-party insurer. I appreciate it was very disappointing and frustrating for Mr T to be later told that this advice was incorrect. Saga has acknowledged this error and said it has provided further training, which I think is reasonable. I appreciate Mr T feels it’s unfair that his premium increased despite no payment being made under his policy, but, as I said above, this reflects underwriting risk assessment rather than claims settlement, and different insurers may assess risks differently. Calls and Mr T’s complaint I’ve also listened to the call where Mr T raised his complaint. Although the call was at times heated, I thought the adviser remained professional throughout. Mr T says he was promised a call from a manager that didn’t happen. Saga says a manager tried twice to call but Mr T missed the calls and the complaint was then automatically escalated, preventing further contact. Saga accepts this wasn’t good service, and I agree. While Mr T was emailed to confirm the escalation, a clearer explanation that a call would no

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longer take place should have been provided in order to avoid causing Mr T further distress. Cancellation and premium refund Mr T cancelled the policy and received a pro-rata refund of £150.30, with the £30 cancellation fee eventually waived. This refund was based on the original premium of £186.31, despite the additional £87.63 having been charged. Saga refunded £50 in relation to the incorrect additional premium, but I agree with the investigator that the cancellation refund should have been calculated using the corrected premium of £228.42, which would have resulted in around £40 more being returned to Mr T. Nevertheless, I’m satisfied that this shortfall is adequately covered by the overall compensation Saga has already paid and in its decision to refund the £30 cancellation fee. Mr T says the lack of notice meant he had to take out more expensive cover elsewhere. I agree the timing was unfortunate. Mr T acted appropriately in declaring the accident, and I agree the revised premium would have caused frustration. However, Saga’s eight-week complaint timescale was in line with regulatory requirements, and it was ultimately Mr T’s decision to cancel the policy. In those circumstances, I don’t think Saga can be held responsible for the cost of his alternative cover. Overall, I think Saga did make mistakes. It incorrectly recorded the claim as fault, charged an incorrect additional premium, miscalculated the refund by around £40, and an adviser gave incorrect reassurance about the renewal premium. Had the accident been added before the renewal quote was issued, much of the inconvenience could have been avoided. However, I think the £175 compensation, together with the refunds and the waived cancellation fee, is fair and in line with awards we would make in similar circumstances. In reaching this conclusion, I’ve taken into account that the policy was cancelled nine days after it renewed and only around a month after the accident, meaning the inconvenience Mr T experienced was relatively short-lived. My final decision For the reasons above, I have decided not to uphold this complaint. 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. Anastasia Serdari Ombudsman

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