Not upheld: Service failures generally complaint against Hood Travel Limited

Decision detail

Summary

Mr and Mrs C complained that Hood Travel Limited unreasonably cancelled their annual travel insurance policy after Mrs C disclosed a cancer diagnosis in November 2016. Mrs C requested that her condition be excluded from coverage rather than the policy being cancelled, and argued that Hood should have provided 30 days' notice of cancellation as stated in the policy. The ombudsman found that Hood acted fairly because the underwriter's risk assessment system determined Mrs C's condition created an unacceptable level of risk that could not be covered, even with exclusions. The ombudsman rejected the argument regarding the 30-day notice period, finding it reasonable to waive this requirement given the underwriter's immediate withdrawal of cover. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman reasoned that underwriters are entitled to decide what level of risk they will insure. When Mrs C disclosed her cancer diagnosis, Hood was required to input this into the underwriter's scoring system. The resulting score was too high for the underwriter to accept, making continuation impossible. While the policy wording allows for changes in conditions in line with changes in risk, the underwriter's criteria meant Mrs C's situation could not be covered. The 30-day notice requirement was not unreasonable to waive given the underwriter's immediate withdrawal of cover. The ombudsman noted that any new policy would likely be more expensive due to Mrs C's condition regardless of whether Hood or the customers cancelled the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website