Upheld: Travel / life insurance claim disputes complaint against Hood Travel Limited
Financial Ombudsman decision DRN-1805301 of 2020-09-10T00:00:00+00:00. Travel / life insurance claim disputes complaint against Hood Travel Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-1805301 |
|---|---|
| Decision date | 2020-09-10T00:00:00+00:00 |
| Firm | Hood Travel Limited |
| Product | Travel insurance |
| Claim type | Travel / life insurance claim disputes |
| Outcome | Upheld |
| Remedy | Hood Travel Limited must pay Mr and Mrs B the difference in price between their policy with Hood (£297) and the new policy they purchased (£900), which equals £603. Interest must be added at 8% simple annual rate from the date the new policy was purchased until settlement. Additionally, Hood must pay £150 compensation for distress and inconvenience. All payments must be made within 28 days of acceptance of the decision, with further interest at 8% per annum simple if payment is delayed. |
Summary
Mr and Mrs B purchased an annual travel insurance policy from Hood Travel Limited after their original insurer withdrew cover for their daughter's neurological condition. Mr B explicitly declared the medical condition and mentioned potential need to make a claim, and Hood repeatedly assured him the family would be fully covered. After cancelling their original policy based on Hood's assurances, Mr and Mrs B discovered that Miss B's condition was actually excluded from Hood's policy. Hood admitted the policy should never have been sold and refunded the premium, but Mr and Mrs B had already lost the opportunity to make a cancellation claim with their original insurer and were forced to take a loan to purchase alternative insurance at £900. The ombudsman upheld the complaint, finding Hood liable for the difference in premiums plus interest and £150 compensation for distress and inconvenience.
The Ombudsman's reasoning
The ombudsman found that Mr B made every effort to ensure his family was covered, honestly declaring medical history and repeatedly checking that everything was recorded correctly. Hood's call handlers never indicated Miss B would not be covered and instead assured full coverage. The ombudsman rejected Hood's argument that Mr and Mrs B should have made a cancellation claim with insurer T, finding that they reasonably relied on Hood's assurances and cancelled their original policy before discovering the exclusion. Given that Mr and Mrs B could not afford the alternative quotes of around £1,300 and had to take a loan for the £900 policy they eventually purchased, the ombudsman concluded they would have made a cancellation claim with T had they known of Hood's error, thus losing that opportunity due to Hood's mistakes.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Hood Travel Limited, all decisions | 7 | 43% |
| Travel / life insurance claim disputes, all decisions | 19,183 | 32% |
| Travel insurance, all decisions | 7,644 | 37% |
Source
Read the original decision on the Financial Ombudsman Service website