Partially upheld: Travel / life insurance claim disputes complaint against Qmetric Group Limited

Decision detail

Summary

Mr M complained that Policy Expert unfairly cancelled his car insurance policy after discovering he had misrepresented his claims and convictions history in his application. Policy Expert cancelled the policy from the start and refunded the premium minus a £60 cancellation fee. The ombudsman found that Mr M failed to take reasonable care when answering clear questions about claims and convictions, and that his misrepresentation was qualifying under CIDRA because Policy Expert would not have offered cover if it had known the correct information. While the cancellation was fair and lawful, the ombudsman upheld the complaint in part because CIDRA does not permit deduction of a cancellation fee from refunded premiums, requiring Policy Expert to refund the £60 fee.

The Ombudsman's reasoning

The ombudsman found that the questions asked by Policy Expert were clear and Mr M failed to take reasonable care not to make a misrepresentation. The misrepresentation was qualifying under CIDRA because Policy Expert demonstrated it would not have offered cover on any terms if it had known the correct information. Therefore, Policy Expert's cancellation from the start was fair and in line with CIDRA. However, CIDRA requires that when an insurer would not have entered into the contract on any terms, it must return the premiums paid, and the legislation does not permit deduction of a cancellation fee. The ombudsman rejected Mr M's request to change how the cancellation was recorded, as this was fair and in line with legislation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website