Upheld: policy avoidance based on alleged misrepresentation; failure to establish qualifying misrepresentation under CIDRA complaint against Watford Insurance Company Europe Limited

Decision detail

Summary

Mr G claimed on his car insurance policy following an accident in August 2024. Watford discovered he had failed to disclose three incidents from the preceding five years when applying for the policy and avoided the policy based on alleged reckless misrepresentation. Mr G argued he misunderstood the application question due to English not being his first language. The ombudsman found that while Mr G did make a misrepresentation, Watford failed to provide evidence from their underwriting guide demonstrating they would have treated his application differently if the incidents had been disclosed. Under CIDRA, such evidence is required to establish a qualifying misrepresentation. The complaint was upheld, the policy was reinstated, and Mr G was awarded £500 compensation.

The Ombudsman's reasoning

Under CIDRA, for a misrepresentation to be qualifying, the insurer must demonstrate they would have offered the policy on different terms or not at all if the consumer had not made the misrepresentation. While Mr G did make a misrepresentation by failing to disclose the three incidents, Watford provided only an underwriting guide excerpt showing they decline cover for more than three claims in five years. Since Mr G had one fault claim and two notification-only incidents (not three fault claims), this threshold did not apply. Watford failed to provide evidence of any underwriting criteria that would have resulted in different treatment of Mr G's application. Without such evidence, the ombudsman could not conclude Mr G made a qualifying misrepresentation, making the policy avoidance unfair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website