Not upheld: provision of incorrect information regarding impact of incident notification on insurance premiums and no claims discount complaint against Advantage Insurance Company Limited

Decision detail

Summary

Miss S complained that Advantage Insurance provided her with incorrect information when she notified them of water damage to her home, advising that the notification would not affect her future premiums or no claims discount. Upon renewal, her premiums increased significantly. Although Advantage upheld the complaint and paid £150 compensation (plus £200 for a related service issue), Miss S referred the matter to the FOS. The ombudsman did not uphold the complaint, finding that the premium increase resulted from the incident notification itself rather than the misinformation, as Advantage was required as a CUE member to record the incident on the database. The ombudsman determined the £350 total compensation was fair and reasonable in the circumstances.

The Ombudsman's reasoning

The ombudsman acknowledged that Advantage provided incorrect information but found that the premium increase was not a direct consequence of this misinformation. Rather, it resulted from Miss S notifying Advantage of an incident that could give rise to a claim. As Advantage is a CUE member, it was required to record the incident on the CUE database, which insurers use to assess claims history and determine premiums. The ombudsman found that Miss S would have notified Advantage of the incident regardless, based on her SWI broker's advice. While Advantage created a loss of expectation, the ombudsman determined that the £350 total compensation paid was fair and proportionate, consistent with FOS award bands for repeated small errors causing short-term impact without financial loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website