Upheld: failure to provide clear information about premium increases; mis-selling complaint against INSURANCE FACTORY LIMITED

Decision detail

Summary

Mr C purchased two separate pet insurance policies with lifetime cover in 2019 for his two dogs, expecting some premium increases due to age but not the significant increases that subsequently occurred. His dogs developed long-term illnesses and made claims, resulting in premiums rising dramatically (one policy from £217 to £982 over six years). IFL accepted it had not provided clear information about the possibility of such significant premium increases at the point of sale. The Ombudsman upheld the complaint, finding that £500 compensation was reasonable for the distress and inconvenience caused by IFL's failure to provide sufficient information, rejecting IFL's initial offer of £350.

The Ombudsman's reasoning

The Ombudsman found that IFL failed to provide clear information about significant premium increases when Mr C initially purchased the policies in 2019. Although IFL may have provided clearer information from 2020 onwards, Mr C had already committed to the policies and his dogs may have been showing symptoms of conditions that would have caused problems if he switched insurers. The Ombudsman rejected IFL's argument that Mr C would not have suffered more shock from two policies being affected, finding that the impact of significant increases on both policies was more substantial. The Ombudsman considered £500 reasonable compensation for the distress and inconvenience caused by the failure to provide sufficient information about premium increases for both policies.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website