Not upheld: careless misrepresentation and proportional settlement reduction complaint against Admiral Insurance (Gibraltar) Limited

Decision detail

Summary

Mr B complained that Admiral unfairly reduced his theft claim settlement by £2,974.90 based on a careless misrepresentation—the failure to declare a named driver's 2023 motoring conviction. Mr B argued the deduction was disproportionate compared to the £62 premium difference and referenced an older ombudsman decision applying a different remedy. The ombudsman found Mr B failed to take reasonable care in not declaring the conviction across multiple policy renewals, making it a qualifying careless misrepresentation under CIDRA. Under CIDRA, Admiral was entitled to settle the claim proportionally (89.82%), which the ombudsman found fair and reasonable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied The Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA) to determine that Mr B failed to take reasonable care in not declaring the named driver's motoring conviction. The misrepresentation was classified as careless rather than deliberate or reckless. Under CIDRA, where a careless qualifying misrepresentation occurs and a claim arises, the insurer may settle on a proportionate basis. The ombudsman found Admiral's proportional settlement at 89.82% was consistent with CIDRA and fair, rejecting Mr B's argument that the deduction was disproportionate to the premium difference. The ombudsman noted that previous decisions do not set binding precedent and that FOS approach evolves over time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website