Not upheld: misrepresentation on insurance application; policy avoidance; claim refusal complaint against Accredited Insurance (Europe) Ltd (AIEL)

Decision detail

Summary

Mr W complained that AIEL unfairly avoided his home insurance policy and refused to pay his claim for wall damage. AIEL discovered that Mr W had misrepresented the costs of a previous claim from December 2023, stating £200 when the actual costs exceeded £5,000 for roof and garage repairs involving scaffolding. The ombudsman found that Mr W failed to take reasonable care when answering the question about claim costs, as a reasonable consumer would have known that such repairs would cost far more than £200. Under CIDRA, AIEL was entitled to avoid the policy as a qualifying misrepresentation, and 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 misrepresent facts when applying for insurance. The question asked for the amount paid out for the claim, not the excess paid by the consumer. A reasonable consumer would have known that roof repairs requiring scaffolding would cost far more than £200. Even if Mr W conducted online research, basic searches show roofer rates alone exceeded £200 per day, making it unreasonable to believe the total claim cost was £200. This constituted a qualifying misrepresentation, and AIEL was entitled to avoid the policy under CIDRA.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website