Not upheld: claim handling, fraud allegation, policy voiding complaint against Zurich Insurance Company Ltd

Decision detail

Summary

Mr S complained about Zurich Insurance Company Ltd's handling of a bicycle insurance claim for accidental damage, alleging the firm acted unfairly by accusing him of fraud and implying his details would be reported to fraud databases. The complaint arose because Mr S increased his bike's insured value and upgraded his policy from Core to Complete cover on 9 December 2024, the same day he submitted an accidental damage claim following an accident on 8 December 2024. Zurich investigated, gave Mr S an opportunity to explain on 17 February 2025, and subsequently voided the policy on 21 March 2025 based on suspected fraud. The ombudsman found that the timing of the policy changes created reasonable suspicion of fraud, Zurich investigated fairly, and was entitled to void the policy under the fraud condition, despite acknowledging the significant emotional and professional distress caused to Mr S.

The Ombudsman's reasoning

The ombudsman applied the test of whether it is more likely than not that fraudulent conduct took place. The sequence of events — increasing both the bike's value and upgrading to accidental damage cover on the same day as the accident and before submitting the claim — created reasonable suspicion. Zurich investigated, gave Mr S an opportunity to explain (which he did on 17 February 2025), and made a decision they were entitled to under the fraud condition of the policy. The ombudsman found no evidence of unreasonable delay and confirmed that Mr S's details were not actually added to fraud databases. While acknowledging the distress caused, the ombudsman concluded Zurich acted within the policy terms and fairly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website