Not upheld: careless misrepresentation - failure to disclose car modifications complaint against First Central Underwriting Limited
Financial Ombudsman decision DRN-6204945 of 2026-04-27T00:00:00+00:00. careless misrepresentation - failure to disclose car modifications complaint against First Central Underwriting Limited. Outcome: Not upheld.
Decision detail
| Reference | DRN-6204945 |
|---|---|
| Decision date | 2026-04-27T00:00:00+00:00 |
| Firm | First Central Underwriting Limited |
| Product | car insurance |
| Claim type | careless misrepresentation - failure to disclose car modifications |
| Outcome | Not upheld |
| Remedy | No remedy ordered. The ombudsman declined to ask First Central to remove the cancellation marker from insurer databases as the firm had not done anything wrong. |
Summary
Miss B complained about First Central's cancellation of her car insurance policy following discovery of a modified air filter that she had failed to disclose when applying. Miss B claimed she did not know about the modification and asked open-ended questions of the seller, but the seller did not volunteer the information. The ombudsman found that Miss B failed to take reasonable care under CIDRA by not specifically asking about modifications, particularly when the seller had mentioned significant work done to the car. First Central provided evidence it would not have offered the policy if the modification had been disclosed, making it a qualifying misrepresentation. The ombudsman found First Central acted fairly by covering the claim and cancelling the policy rather than avoiding it entirely, and retained the full year's premium as it had indemnified Miss B. The complaint was not upheld.
The Ombudsman's reasoning
Under CIDRA, consumers must take reasonable care not to make misrepresentations when taking out insurance. The question about modifications was clear. Miss B had an opportunity to ask the seller about modifications when the seller mentioned significant work had been done to the car, but she did not. Therefore, Miss B failed to take reasonable care. The misrepresentation was qualifying because First Central provided evidence it would not have offered the policy if the modification had been disclosed. First Central classified it as careless misrepresentation, which was appropriate. Under CIDRA, First Central could have avoided the policy entirely and refused to cover the claim, but instead it chose the more favourable option of covering the claim and cancelling the policy, while retaining the full year's premium as it had indemnified Miss B. This was fair and reasonable.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| First Central Underwriting Limited, all decisions | 204 | 42% |
Source
Read the original decision on the Financial Ombudsman Service website