Upheld: Other regulated complaint complaint against Insurance Factory Limited

Decision detail

Summary

Mrs L purchased a lifetime pet insurance policy from IFL in 2017 for approximately £336 annually. Following a claim in 2019, her premium increased dramatically to £835 in 2020 and £1,628 in 2021, eventually becoming unaffordable. IFL acknowledged failing to adequately inform Mrs L at the point of sale that lifetime policies commonly experience significant premium increases following claims. The ombudsman upheld the complaint, finding that while Mrs L would likely have purchased the policy anyway, the lack of disclosure caused her unnecessary distress and inconvenience. IFL was ordered to pay £300 total compensation (or £150 if £150 had already been paid).

The Ombudsman's reasoning

While lifetime pet policies are more expensive and commonly subject to significant premium increases following claims, IFL failed to provide Mrs L with adequate information about this possibility at the point of sale. Although Mrs L likely would have purchased the lifetime policy regardless (as it was the type of cover she sought), the lack of information meant she was unprepared for the dramatic increases and experienced unnecessary distress and inconvenience. Fair compensation should address this distress and the shock of the unexpected increases, recognizing that informed Mrs L would have anticipated the possibility of affordability issues.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website