The complaint related to a protected no-claims discount and the Ombudsman ruled in favour of the company.

The complainant took out a policy with the company in 1995, allowing her to incur up to two claims in a three-year period, costing in total not more than £3,000, without incurring any loss of her no-claims discount.

In May 1996, the customer was involved in a collision and submitted a claim which did not affect her no-claims bonus as provided for in her policy.

However, in November 1998, the consumer requested the cancellation of her policy and asked the company to send her a proof of her no-claims bonus. It confirmed that she was entitled to a seven-year no-claims bonus with the company, but declared the claim made in 1996.

The complainant felt she was misled by the company and that it had promised her a service which it could not provide.

But the company said it had fulfilled its duties under the policy. It pointed out that the bonus protection did not remove the complainant's obligation to disclose all accidents when proposing for insurance. The insured also retained the benefit of the protection if she remained with the company.

It also said it could not deceive other insurers by stating that the consumer had a full no-claims bonus when in fact she had made a claim.

The policy had been effected through an independent intermediary. As a result, the Ombudsman found that if the customer was misled as to the nature of the bonus protection, the fault did not lie with the company, which had honoured its undertakings under the policy. The claim was not upheld.