Liverpool Victoria Insurance Company Limited · DRN-5885246

The complaint Mrs W and Mr W complained about how Liverpool Victoria Insurance Company Limited (LV) dealt with their claim under Mrs W and Mr W’s motor insurance policy. What happened Mrs W and Mr W’s car was damaged while parked overnight. It was hit by an unknown driver, who didn’t stop or leave any contact details and so couldn’t be identified. LV paid Mrs W and Mr W’s claim under the policy for the car’s damage. They treated the claim as a fault claim against Mr W and recorded it on the motor insurance database against him. Mr W and Mrs W were unhappy about this. They said this increased Mr W’s future premiums for other insurance. They didn’t want LV to record it as their fault at all. But they said if LV did have to record it on the databases, they shouldn’t have recorded it as Mr W because he was only the named driver, whereas Mrs W was the policyholder, and owner of the car. They wanted LV to remove the fault claim from motor insurance databases completely or at least change the claim record from being against Mr W to being against Mrs W. LV said they had a legal obligation to record the incident on the motor insurance database, they recorded it as fault because they couldn’t recover their losses from anyone, and it was their normal process to record the claim against the person who had last driven the car before the incident. The investigator didn’t recommend that the complaint should be upheld. She thought LV hadn’t acted unreasonably. Mrs W and Mr W didn’t agree and so I was asked to decide. I issued my provisional decision on 28 February 2026, partly upholding the complaint. The deadline for responses has now passed. 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. In my provisional decision I said : “Mrs W and Mr W were both unhappy that the incident had been noted on the motor insurance claims databases as their fault at all. They said they’d been nowhere near the car at the time, and it was nothing to do with eithers’ driving. They also said that if LV did have to record the fault claim against one of them, it shouldn’t have been Mr W. This was because he was only the named driver, whereas Mrs W was the policyholder, and owner of the car. Mr W felt that LV had given him an accident record for something that he didn’t see as an accident at all, and without informing him. He said it wasn’t his fault and he had no control. over it. It wasn’t his policy or his car. He said that LV’s process was an unfair artificial. construct and if LV had to use that it should end with the insured policyholder. He said that.

-- 1 of 4 --

when LV asked his wife who’d been driving the car last, they didn’t explain that they would. use that to designate who should have the accident record. He wanted LV to remove the fault claim from the insurance database completely, or if they couldn’t do that, at least. amend it to his wife rather than him. They said Mrs W’s no claim discount (NCD) had already been adversely affected. LV said they had a legal obligation to record the incident on the motor insurance database, and they’d recorded it against Mr W because Mrs W had at first told them that he had been the last driver of the car. She later said she’d forgotten that she had driven it last. LV wouldn’t amend the insurance database markers to refer to Mrs W. They said that it was “our normal reporting process, if there is no one in the vehicle at the time of the accident, we must record the last known driver.” LV told Mrs W and Mr W that even though they’d have to record the incident on the database regardless, they could change the record to “notification only” rather than fault if Mrs W and Mr W repaid LV the claim costs which LV had paid out to them. Mrs W and Mr W didn’t agree and said that felt like blackmail. However this is standard insurance procedure and is known as buying back the claim. So I don’t think it was unreasonable of LV to offer Mrs W and Mr W that option. It’s also standard insurance practice when a claim arises but the insurer cannot recover their claim costs from any third party, for the claim to remain a fault claim against the policy, even though those parties weren’t at fault. That’s what has happened here because Mrs W and Mr W’s car was hit by an unidentified driver, and I see that LV did explain that to Mrs W and Mr W. We don’t think it is unreasonable because the insurer has incurred unrecoverable costs. And LV calling it a fault claim doesn’t mean that they think that the incident was Mr or Mrs W’s fault. It’s merely called a fault claim if the insurer can’t recover their claim costs from the insurer of the person who was at fault. So as LV haven’t been able to reclaim their costs, it’s not unreasonable for them to record this claim as fault. However here it is Mrs W who is the policyholder and legal owner of the policy and the claimant of the costs LV paid. It is Mrs W whose claim has caused LV to have unrecoverable losses. And so we would expect LV to record the incident and fault against her, rather than against Mr W. I’ve looked at Mrs W and Mr W’s policy. It includes a summary of LV’s privacy policy which links to their online document headed “How we use your personal information”. In it LV refer to how they will pass information to claims underwriting or other databases. It states that LV will share information about the policyholder regarding “claims, incidents or accidents”. However when sharing information about “Anyone named on the policy or any other third- party” this will only be regarding “Claims, incidents, for motor insurance, accidents where they're in control of the vehicle or as a passenger”. This would suggest that LV should have recorded the claim against Mrs W as policyholder, and not Mr W. This is because he was not in control of the vehicle or a passenger when the accident happened. Overall, for the reasons I explained above, I still think that LV acted reasonably in putting a fault marker regarding the incident on motor insurance databases, even though the accident arose though no fault of their own. So I can’t require LV to remove the fault claim entry from the databases. But I don’t think LV acted reasonably in recording that fault incident against Mr W rather than Mrs W. This is because he was not the policyholder, it was not his claim, and because of LV’s privacy policy wording above. This means that I partly uphold the complaint. Mrs W said to LV “lf you must continue to apportion an accident to someone, surely it should

-- 2 of 4 --

be to me and my loss no claims bonus which l was happy to accept.“ Having the incident against Mrs W may also adversely impact her future insurance premiums instead, but I have to presume that she has already considered this before asking for the fault claim marker to be put against her instead. I think that should amend the record of the fault claim on internal and external motor insurance databases to show it as against Mrs W and not Mr W. I also think that LV should provide Mr W with a letter saying that they entered him on any databases in relation to the incident in error, as he may have to declare this to future insurers if he has made any claim or been involved in any incident or accident, which could result in an increased premium, or no offer of Insurance. If he has taken out insurance, we’d expect him to give that error letter to his insurer for them to recalculate his premium as if LV hadn’t recorded the incident against him. I see that the matter has put Mr W and Mrs W to some effort to resolve and has caused them some inconvenience and stress at a time when Mrs W was unwell. I think that LV should pay them £200 in compensation to reflect that.” Mr W and Mrs W accepted my provisional decision, and LV have not replied within the deadline. I haven’t been shown any further evidence, so I’ve no reason to change my decision. And so I make my final decision in the same terms as my provisional decision. My final decision For the reasons I have given above, it’s my final decision to partly uphold the complaint. I require Liverpool Victoria Insurance Company Limited to do the following: • Correct the fault marker on all motor insurance databases and internal so that it shows the claim against Mrs W and not Mr W. • Give Mr W a letter explaining that Liverpool Victoria Insurance Company Limited recorded the fault claim against him in error which he can show current and future insurers. • Pay Mrs W and Mr W £200 in compensation for the distress and inconvenience Liverpool Victoria Insurance Company Limited’s actions caused them. Liverpool Victoria Insurance Company Limited must pay the compensation within 28 days of the date on which we tell them Mrs W and Mr W accept my final decision. If they pay later than this they must also pay interest on the compensation from the date of my final decision to the date of payment at 8% a year simple. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs W and Mr W to accept or reject my decision before 17 April 2026.

-- 3 of 4 --

Rosslyn Scott Ombudsman

-- 4 of 4 --