Not upheld: policy avoidance for careless misrepresentation; claim refusal complaint against First Central Underwriting Limited
Financial Ombudsman decision DRN-6334202 of 2026-06-04T00:00:00+00:00. policy avoidance for careless misrepresentation; claim refusal complaint against First Central Underwriting Limited. Outcome: Not upheld.
Decision detail
| Reference | DRN-6334202 |
|---|---|
| Decision date | 2026-06-04T00:00:00+00:00 |
| Firm | First Central Underwriting Limited |
| Product | Motor insurance |
| Claim type | policy avoidance for careless misrepresentation; claim refusal |
| Outcome | Not upheld |
| Remedy | No additional remedy ordered. First Central had already: (1) returned Mr D's premiums; (2) paid £250 compensation for poor service; (3) removed the voidance marker from Mr D's record; (4) not recorded the voidance on external databases; (5) changed Mr D's no claims bonus from disallowed to allowed; and (6) offered to speak to prospective future insurers about the voidance if necessary. |
Summary
Mr D complained that First Central unfairly avoided his motor insurance policy and refused his claim after he answered 'no' to a question about vehicle modifications, when his car actually had a body kit installed. First Central classified this as a careless misrepresentation under CIDRA and avoided the policy. The ombudsman found that although Mr D genuinely believed the modifications were factory-fitted and standard, a reasonable consumer should have recognized the car was modified and sought clarification. The ombudsman determined the misrepresentation was qualifying because First Central's underwriting guidance confirmed it would not have offered the policy if it had known about the modifications. Under CIDRA, First Central was entitled to avoid the policy and refuse the claim. The ombudsman also found First Central acted fairly in its handling of service issues and in minimizing the impact on Mr D by not recording the voidance externally and adjusting his no claims bonus.
The Ombudsman's reasoning
The ombudsman applied The Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA) to determine that Mr D failed to take reasonable care not to make a misrepresentation. Although Mr D genuinely believed the modifications were factory-fitted and standard, the standard of care is that of a reasonable consumer. The ombudsman found that the modified car was noticeably different from a standard car and that a reasonable consumer should have sought clarification rather than relying solely on the sales advert. The misrepresentation was qualifying because First Central's underwriting guidance confirmed it would not have offered the policy had it known about the modifications. As the misrepresentation was careless (not deliberate or reckless), CIDRA permitted First Central to avoid the policy and refuse the claim while returning premiums. The ombudsman also found First Central acted fairly in minimizing the impact on Mr D through not recording the voidance externally and adjusting his no claims bonus.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| First Central Underwriting Limited, all decisions | 204 | 42% |
| Motor insurance, all decisions | 23,874 | 35% |
Source
Read the original decision on the Financial Ombudsman Service website