Not upheld: non-disclosure of material fact (spouse's bankruptcy) and policy avoidance complaint against Aviva Insurance Limited

Decision detail

Summary

Mr S complained that Aviva unfairly declined his burglary claim and avoided his home insurance policies from 2023 and 2024 due to non-disclosure of his wife's bankruptcy from 2019. Mr S claimed he was unaware of the bankruptcy until late 2024 and that the broker was responsible for any failures. The ombudsman found that the policy schedules clearly required disclosure of bankruptcy for anyone living with the policyholder, and a reasonable consumer would have checked with their spouse. Under CIDRA, Mr S failed to take reasonable care at both inception and renewal. Aviva provided evidence it would not have offered cover had the bankruptcy been disclosed, making this a qualifying misrepresentation. The complaint was not upheld.

The Ombudsman's reasoning

Under CIDRA, Mr S had a duty to take reasonable care not to misrepresent material facts. The policy schedules clearly asked about bankruptcy of family members living with him. A reasonable consumer would have understood this extended to their spouse and would have checked with them. Mr S failed to take reasonable care at both inception and renewal. Aviva provided evidence it would not have offered the policies had the bankruptcy been disclosed, making this a qualifying misrepresentation. The misrepresentation was careless rather than deliberate or reckless, but CIDRA permits avoidance if the insurer would not have offered cover at all. The MTA in January 2025 did not change this outcome as Aviva could avoid from the point of renewal.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website