Partially upheld: Other regulated complaint complaint against AXA Insurance Designated Activity Company

Decision detail

Summary

Mr A complained that AXA avoided his home insurance policy and declined his claim for basement flooding. AXA avoided the 2024 policy citing non-disclosure of financial arrangements with creditors, specifically a settlement agreement with creditor W following a CCJ. The ombudsman found AXA's avoidance was fair because Mr A was asked whether he had arrangements with creditors, failed to disclose his settlement agreement, and AXA would not have offered cover if the correct information had been provided. However, the ombudsman found the claim decline was unfair because AXA's own loss adjuster established the flooding occurred on 15 December 2024 (the day before the policy renewed), meaning the loss fell within the 2023 policy year, not the 2024 policy. AXA is required to reconsider the claim under the 2023 policy without revisiting the financial disclosure issue, though it may investigate the property ownership issue separately.

The Ombudsman's reasoning

The ombudsman found that although AXA initially focused on the wrong question (from the Statement of Fact rather than what was actually asked), it was fair to consider the complaint in light of the actual question asked by the broker. Mr A was asked if he had 'never been declared bankrupt, been subject to bankruptcy proceedings or had any arrangements with creditors' and answered 'no'. The ombudsman found this was an incorrect answer because Mr A had a settlement agreement with creditor W following a CCJ, which constitutes an arrangement with a creditor. The question was reasonably clear in the context of financial disclosures, and Mr A failed to take reasonable care in answering it. AXA's underwriters confirmed they would not have offered cover if the correct information had been provided, making this a qualifying misrepresentation under CIDRA. Therefore, AXA's avoidance of the 2024 policy was fair. However, the ombudsman found the claim decline was unfair because AXA's own loss adjuster established the loss occurred on 15 December 2024 (in the 2023 policy year), not 16 December 2024. AXA should have amended the claim date when it received this information and considered the claim under the 2023 policy. The ombudsman rejected arguments about health-related vulnerability, noting no medical evidence was provided and Mr A had maintained he answered correctly rather than claiming confusion. The ombudsman also found it fair for AXA to reserve rights regarding the property ownership issue for later investigation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website