Not upheld: Motor insurance, total loss valuation complaint against Aviva Insurance Limited

Decision detail

Summary

Mr V complained that Aviva unfairly cancelled his motorcycle insurance policy and declined his theft claim after his new motorbike was stolen 12 days after a mid-term alteration. The core issue was that Mr V had asked his broker F to reduce the declared value of the motorbike from £10,000 to £5,000 to obtain cover, after Aviva initially declined at the true value. The ombudsman found this constituted a qualifying misrepresentation under CIDRA, as Mr V deliberately understated the value at his own express request and Aviva would not have offered cover at the true value. Aviva's cancellation of the policy and claim denial were found to be fair and lawful under CIDRA. The ombudsman upheld Aviva's £150 compensation for delay in notification but noted Mr V may have a separate complaint route against the broker.

The Ombudsman's reasoning

The ombudsman found that Mr V made a qualifying misrepresentation under CIDRA by understating the motorbike's value from approximately £10,000 to £5,000 at his own express request to the broker. Aviva provided evidence that it would not have accepted cover at the true value, satisfying the definition of a qualifying misrepresentation. Under CIDRA, Aviva was entitled to cancel the policy from the mid-term alteration date and decline the claim. The £150 compensation for delay in notification was considered fair, as most of Mr V's distress stemmed from the claim rejection rather than the delay itself. The ombudsman noted that Mr V may have a separate complaint route against the broker F for processing the misvaluation without warning of the consequences.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website