Not upheld: Travel / life insurance claim disputes complaint against Accredited Insurance (Europe) Ltd

Decision detail

Summary

Mr S complained that AIE unfairly voided his home insurance policy and declined his theft claim after discovering that jewellery stolen in a burglary was worth approximately £40,000, significantly more than the £10,000 maximum he had stated when taking out the policy. Mr S claimed he was unaware of the actual value of the items, many inherited from his mother, and had answered all questions honestly. The ombudsman found that while Mr S did not deliberately mislead AIE, he failed to take reasonable care in valuing his valuables, providing only an unverified estimate rather than seeking expert assessment. Under the Consumer Insurance (Disclosure and Representations) Act 2012, this constituted a careless qualifying misrepresentation, and AIE was entitled to void the policy as its acceptance criteria would have declined the policy at the correct valuation. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied CIDRA 2012 to assess whether there was a qualifying misrepresentation. The questions asked by AIE were clear and specific. Although Mr S did not deliberately mislead AIE and genuinely believed his answers were honest, the significant discrepancy between his estimated valuation (£10,000 maximum) and the expert valuation (£40,000) demonstrated he did not take reasonable care. His assessment was merely a 'best guess' without any expert verification, and he made no effort to check the actual values. Under CIDRA, when a qualifying misrepresentation is careless, the insurer can void the policy if it would not have offered it with correct information. AIE's acceptance criteria confirmed it would have declined the policy at the correct valuation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website