Not upheld: underinsurance and policy voidance for careless misrepresentation complaint against Covea Insurance plc

Decision detail

Summary

Mr N complained that Covea unfairly voided his contents insurance policy and declined his claim following a burglary in January 2024, after determining he was underinsured. Covea found stolen jewellery valued at approximately £65,000 against a high-risk item limit of only £20,000, concluding Mr N had made a careless misrepresentation by failing to declare the true value of his contents when the policy was taken out in December 2020. Mr N argued the misrepresentation was innocent, that questions asked were unclear, and that he could not reasonably have known the values of items purchased 40-50 years earlier. The ombudsman found Mr N was underinsured, failed to take reasonable care to avoid misrepresentation, and that Covea's underwriting criteria showed it would not have insured him on any terms. The complaint was not upheld, with the ombudsman finding Covea's decision to void the policy and return premiums was fair and in line with relevant law.

The Ombudsman's reasoning

The ombudsman found that Mr N was underinsured on multiple aspects of his contents policy and failed to take reasonable care to avoid making a misrepresentation. Covea provided clear underwriting guidance demonstrating it would not have insured Mr N on any terms had it known the true value of his contents. Under the relevant law, Covea was entitled to void the policy from inception and return premiums for careless misrepresentation. The ombudsman rejected Mr N's arguments that the misrepresentation was 'innocent' (not a legal category), that questions were unclear (a matter for the broker Company S, not Covea), and that voidance was disproportionate, finding Covea's actions aligned with law and established FOS approach.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website