Not upheld: non-disclosure of material information (vehicle modifications) and claim rejection complaint against One Insurance Limited

Decision detail

Summary

Mr F complained that One Insurance unfairly rejected his theft claim and voided his motor insurance policy after discovering he had added a bumper bar and wheel trims to his vehicle without disclosing these modifications. Mr F argued these were manufacturer-issued accessories rather than modifications. One Insurance maintained that Mr F had been asked clearly about modifications at application and renewal and should have disclosed the changes. The ombudsman found that the questions and information provided were sufficiently clear, that the additions constituted modifications under the policy definition, and that One Insurance's underwriting criteria demonstrated it would have refused the policy if the modifications had been disclosed. Accordingly, the ombudsman upheld One Insurance's right to void the policy and reject the claim under CIDRA, noting that One Insurance had refunded the premiums as required.

The Ombudsman's reasoning

The ombudsman applied The Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA) to determine whether Mr F took reasonable care when answering questions about modifications. The clear questions asked at application and renewal, combined with detailed information about what constitutes modifications (including cosmetic changes and wheel changes), meant a reasonable consumer would have understood the requirement to disclose the bumper bar and wheel trims. The non-disclosure constituted a qualifying misrepresentation because One Insurance demonstrated through its underwriting criteria that it would not have offered the policy if the modifications had been disclosed. As the breach was careless (not deliberate or reckless), CIDRA permits policy avoidance with premium refund, which One Insurance provided.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website