Upheld: policy administration error, service failure, delay in reinstatement complaint against Howserv Limited trading as Avanti Travel Insurance

Decision detail

Summary

Mr C purchased an annual multi-trip travel insurance policy with Howserv (Avanti Travel Insurance) starting 9 March 2025. Despite instructing Howserv not to cancel the policy on 6 March 2025, Howserv's webchat transcript incorrectly stated it had been cancelled. Mr C discovered this error on 5 April 2025 while already on a trip to country S with his wife. Howserv took ten days to reinstate the policy and refused to extend the maximum trip duration as the trip had started. During the ten-day period of uncertainty, Mr C and his wife limited their activities due to lack of insurance cover. Howserv accepted its errors and offered £200 compensation, which Mr C rejected, requesting £5,000 or reimbursement for a replacement trip. The Ombudsman upheld the complaint, finding Howserv's offer insufficient but rejecting Mr C's request for trip reimbursement, awarding £425 compensation for distress and inconvenience.

The Ombudsman's reasoning

Howserv's errors and poor service caused Mr C considerable distress, upset, worry and significant inconvenience. The policy cancellation contrary to his clear instruction, the ten-day delay in reinstatement, and the incorrect advice about extending the policy while on the trip were all serious failures. However, Mr C suffered no direct financial loss as he had not pre-booked activities. His decision to limit activities was his own choice made in response to the uncertainty, not a direct consequence of Howserv's error. The requirement in travel insurance policies to act as if uninsured means Mr C should not have undertaken activities he believed carried increased medical risk. Therefore, compensation for distress and inconvenience rather than reimbursement for a replacement trip is the appropriate remedy. The £200 offer was insufficient given the level of distress caused, but the £425 award is reasonable compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website