Not upheld: policy avoidance for careless misrepresentation; claim denial complaint against Accredited Insurance (Europe) Ltd

Decision detail

Summary

Mr and Mrs G complained that Accredited Insurance unfairly avoided their home insurance policy and declined their claim for cracking. They had answered 'No' to questions about cracking during the application process, relying on a pre-purchase survey that described the cracking as minor and cosmetic. Accredited avoided the policy as a careless misrepresentation, arguing that Mr and Mrs G should have disclosed all cracking. The ombudsman found that while Mr and Mrs G reasonably answered 'No' to the comparison website's question (which excluded cosmetic cracking), they failed to take sufficient care when answering Accredited's more specific question on its own website, which required disclosure of any cracking. The ombudsman upheld Accredited's avoidance as fair and reasonable under CIDRA 2012, finding the misrepresentation was careless and qualifying.

The Ombudsman's reasoning

The ombudsman applied CIDRA 2012, which requires consumers to take reasonable care not to make a misrepresentation. The ombudsman found that Accredited's question about cracking was clear and unambiguous, covering any cracking regardless of severity. Although Mr and Mrs G reasonably answered 'No' to the comparison website question based on the survey describing the cracking as cosmetic, they failed to take sufficient care when answering Accredited's more specific question on its own website. The ombudsman found the misrepresentation was careless (not deliberate), and Accredited provided sufficient warning that Mr and Mrs G needed to review and verify their answers. Since Accredited provided underwriting evidence that it would not have offered cover if cracking had been declared, the misrepresentation was qualifying, and avoidance was a proportionate remedy under CIDRA.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website