Not upheld: Travel / life insurance claim disputes complaint against Wakam UK Limited

Decision detail

Summary

Mr J complained that Wakam unfairly avoided his commercial vehicle insurance policy and refused to deal with his theft claim. Wakam had avoided the policy based on Mr J's alleged misrepresentation regarding permitted vehicle use, as the van was being used to carry goods for another business rather than only for the stated permitted purposes. The ombudsman determined that the Insurance Act 2015 applied to this commercial policy and that Mr J had failed to make a fair presentation of the risk. The information provided at point of sale was sufficiently clear, and Wakam evidenced it would not have offered the policy with accurate information. Therefore, the ombudsman found Wakam was entitled to avoid the policy and deny the claim, and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman determined that the Insurance Act 2015 was the applicable legislation for this commercial policy, not CIDRA. Under the Insurance Act, Mr J was required to make a fair presentation of the risk. By agreeing to a statement about permitted vehicle use that did not reflect the actual use (carrying goods for another business), Mr J failed to make a fair presentation. The information provided at point of sale was sufficiently clear for a reasonable person to understand the permitted uses. Wakam evidenced it would not have offered the policy had the correct information been provided, making this a qualifying breach. Therefore, Wakam was entitled to avoid the policy and was not required to deal with the claim, though it correctly returned the premium.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website