The complainant added her daughter as a temporary named driver to her motor policy in September 2001, and then permanently in October 2001.
Due to technical difficulties, the insurer failed to increase her direct debit premium payments on both occasions.
The policy fell into arrears as a result.
In April 2002, the insurer wrote to the complainant demanding payment of the balance and warning that if it was not received, it would cancel the policy.
It cancelled the policy in May 2002 for non-settlement of the account.
After negotiations, the insurer acknowledged its mistake and offered to waive the outstanding premiums due. The complainant felt that this was not enough to cover the inconvenience she had suffered.
The insurance ombudsman upheld the complaint on the basis that there was clear evidence that the company's administration of the policy was poor.
Bearing in mind that the company had offered to waive the outstanding premiums, she also ordered it to pay an extra sum on the grounds of poor service.