Not upheld: Travel / life insurance claim disputes complaint against Lloyds Bank General Insurance Limited

Decision detail

Summary

Mr G complained that Lloyds unfairly avoided his home insurance policy after discovering he had made two previous claims rather than the one he disclosed. Mr G argued he honestly believed he had only made one claim, which was later split into two without his knowledge. The ombudsman found that Mr G was aware the claim had been split into two separate claims (evidenced by two separate payments for leaks in different property areas) and therefore failed to take reasonable care when answering the clear disclosure question. As Lloyds' underwriting criteria excluded customers with two or more claims, the misrepresentation was qualifying, and Lloyds was entitled under CIDRA to avoid the policy and refund premiums. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied The Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA), which requires consumers to take reasonable care not to make misrepresentations. The question asked was sufficiently clear. Mr G failed to take reasonable care because he was aware the claim had been split into two separate claims (evidenced by two separate payments for leaks in different areas), yet answered that he had only made one claim. This was a careless (not deliberate or reckless) qualifying misrepresentation because Lloyds' underwriting criteria showed it would not have offered cover with knowledge of two claims. Under CIDRA, Lloyds was entitled to avoid the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website