Not upheld: policy avoidance based on misrepresentation, claim handling, policy cancellation complaint against UK Insurance Limited trading as Churchill Insurance

Decision detail

Summary

Mrs A complained that UKI unfairly handled her water damage claim, avoided her buildings only insurance policy, and cancelled a separate combined buildings and contents policy. UKI determined Mrs A had made a deliberate qualifying misrepresentation by declaring the property as her main residence when evidence suggested otherwise, including external database information and a second policy also declared as main residence. The ombudsman found the renewal documentation sufficiently clear, Mrs A's evidence inadequate to resolve concerns about residency, and the misrepresentation deliberate or reckless under CIDRA standards. Consequently, the ombudsman upheld UKI's right to avoid the policy, retain premiums, decline the claim, and cancel the separate policy with enhanced notice, finding all actions fair and reasonable.

The Ombudsman's reasoning

The ombudsman applied the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA) to determine that Mrs A made a deliberate qualifying misrepresentation when renewing her policy in 2024. The renewal documentation was sufficiently clear and specific, asking directly whether Mrs A and her family occupied the home permanently. The evidence provided by Mrs A (utility bills dated after the loss, council tax bill with gaps, and a second policy also declared as main residence) failed to resolve UKI's concerns about her actual residency. The ombudsman found it reasonable for UKI to conclude the misrepresentation was deliberate or reckless rather than careless, given the clarity of the questions and the materiality of the information. Under CIDRA, UKI was entitled to avoid the policy, retain premiums, and decline the claim. The ombudsman also found UKI's cancellation of the separate policy justified under its policy terms, with notice exceeding contractual requirements.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website