Not upheld: Account administration errors complaint against Avon Insurance Plc

Decision detail

Summary

Mr and Mrs W held accidental death policies with Avon Insurance Plc that lapsed in November 2010 following a failed direct debit payment. Avon sent a notification letter on 4 November 2010 informing them of the lapse, but Mr and Mrs W claimed not to have received it and did not discover the lapse until October 2018. They requested a refund of all premiums paid since inception. The ombudsman rejected the complaint, finding that Avon had properly followed policy terms and that Mr and Mrs W should have noticed the cessation of premium collection and sought reinstatement within the permitted six-month window.

The Ombudsman's reasoning

The ombudsman was satisfied that Avon had properly notified Mr and Mrs W of the failed payment and the consequences via a letter on 4 November 2010. Although Mr and Mrs W claimed not to have received this letter, the ombudsman found it reasonable to expect them to have noticed over the following months that premiums were no longer being collected. The ombudsman noted that had they discovered this within six months, reinstatement would likely have been possible under the policy terms. The eight-year delay before discovering the lapse was unreasonable, and the ombudsman saw no reason to require return of premiums paid while cover was in force, as Avon would have been obliged to pay valid claims during that period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website