Not upheld: Service failures generally complaint against Principal Insurance Limited

Decision detail

Summary

Mr S complained about Principal Insurance's handling of his commercial vehicle insurance policy after an additional named driver was added in November 2024. The underwriter discovered the additional driver had undisclosed motoring convictions and increased the premium from £479.96 to £1,172.87. Mr S refused to pay the additional premium and declined Principal Insurance's offers to either remove the driver or add the premium to his finance agreement. The policy was cancelled in December 2024, leaving an outstanding balance of £353.79 on the finance agreement. The ombudsman found that Mr S had failed to disclose material information, the underwriter was entitled to adjust the premium, and Principal Insurance acted fairly in offering alternatives and cancelling the policy when Mr S refused to pay.

The Ombudsman's reasoning

The ombudsman found that Mr S failed to disclose the additional driver's motoring convictions, which was a material fact required for the insurance quote. The underwriter was entitled to request the driving licence information to validate the change and to adjust the premium accordingly. Although the delay of 27 days before discovery was frustrating, the insurer was entitled to raise the issue and charge the correct premium. Principal Insurance offered reasonable alternatives to resolve the matter, including removing the driver with a refund or adding the premium to the finance agreement. Since Mr S refused all options and the policy was cancelled, the outstanding balance on the finance agreement remained payable. Principal Insurance acted fairly by waiving its administration fee and commission.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website