Not upheld: policy cancellation due to non-payment and refusal of monthly payment option complaint against Aviva Insurance Limited

Decision detail

Summary

Miss N complained that Aviva wrongly cancelled her home insurance policy and unfairly refused to allow monthly direct debit payments on a replacement policy. Miss N had cancelled her direct debit instruction with her bank, leaving a final premium outstanding. Aviva contacted Miss N by text and letter requesting payment within 14 days before cancelling the policy. When Miss N sought new cover, Aviva offered a quotation at the same premium but required full payment instead of monthly instalments. The ombudsman found the cancellation was fair given the policy terms, adequate notice, and Miss N's awareness of the outstanding payment, and that Aviva was entitled to decline monthly payments based on commercial risk considerations.

The Ombudsman's reasoning

The ombudsman found that Aviva's cancellation was fair because the policy terms clearly permitted cancellation for non-payment, Aviva provided reasonable notice and opportunity to pay, and Miss N was aware of the outstanding balance. Regarding the refusal of monthly payments on the new policy, the ombudsman accepted that insurers are entitled to decide payment options based on commercial risk considerations, provided they do so fairly and consistently, and Aviva satisfied this requirement.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website