Insurers should spell out the terms of 'keys in car' exclusion clauses or face having to pay out claims, according to the Financial Ombudsman Service (FOS).
In a recent case the FOS upheld a complaint where a policyholder's claim was turned down under a 'keys in car' clause. The policyholder maintained he had not been made aware of the exclusion.
A statement by the FOS said: "Insurers need to draw the attention of policyholders to this clause, as it constitutes a major restriction on the scope of cover. Where insurers fail to do this we may uphold a complaint, even though the circumstances of the theft fall within the scope of the exclusion clause."
Norwich Union customer relationship technical manager Mike O'Sullivan said: "We have heard of this sort of thing before but this is the first time it has been spelled out so clearly.
"What the FOS is saying is it is concerned about insurers not bringing this kind of exclusion to policyholders' attention."
