Not upheld: policy avoidance for careless misrepresentation; claim denial complaint against Advantage Insurance Company Limited

Decision detail

Summary

Mr W complained that Advantage Insurance unfairly avoided his motor insurance policy and refused to pay his claim for a stolen car after discovering he had unspent non-motoring convictions that he had failed to disclose in his application. Although a third party completed the application on his behalf, Mr W remained responsible for ensuring its accuracy. The ombudsman found that Mr W's failure to correctly answer the question about convictions constituted a careless qualifying misrepresentation under CIDRA, and that Advantage's underwriting criteria showed it would not have offered cover had the true position been disclosed. Therefore, Advantage was entitled to avoid the policy and decline the claim. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied CIDRA, which requires consumers to take reasonable care not to make misrepresentations. Mr W failed to take reasonable care in answering the question about non-motoring convictions, even though a third party completed the application on his behalf—Mr W remained responsible for ensuring accuracy. The misrepresentation was qualifying because Advantage's underwriting criteria showed it would not have offered cover if the true position had been disclosed. As the misrepresentation was careless (not deliberate or reckless), Advantage was entitled to avoid the policy and decline the claim under CIDRA. The call handling was appropriate as the questions asked were relevant to validating the claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website