Not upheld: policy avoidance for misrepresentation; undisclosed modifications complaint against AXA Insurance UK Plc

Decision detail

Summary

Mr S complained that AXA unfairly avoided his van insurance policy following a claim, citing undisclosed modifications (bed, sink, solar panels). AXA had asked whether the van was modified and provided guidance defining modifications as changes to original specification. Mr S answered 'no' but later admitted making the modifications. The ombudsman found that Mr S failed to take reasonable care as a reasonable consumer would have answered 'yes' or sought clarification given the clear question and guidance provided. Under CIDRA 2012, the misrepresentation was qualifying and careless, allowing AXA to avoid the policy and refuse the claim while returning premiums. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Consumer Insurance (Disclosure and Misrepresentation) Act 2012, which requires consumers to take reasonable care not to misrepresent facts. The question asked was clear and the guidance provided helpful examples. The modifications Mr S made (bed, sink, solar panels) were significant changes to the van's original specification. A reasonable consumer would have either answered 'yes' or queried with the insurer whether these changes constituted modifications, rather than simply answering 'no' because specific items weren't listed. The misrepresentation was careless rather than deliberate or reckless. Under CIDRA, where an insurer would not have offered cover on any terms, it can avoid the policy and refuse claims while returning premiums, which is what AXA did.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website