Not upheld: policy avoidance for non-disclosure of material facts (vehicle modifications) complaint against Ageas Insurance Limited

Decision detail

Summary

Mr M1 and Mr M2 complained that Ageas Insurance Limited unfairly avoided their commercial vehicle insurance policy and refused their claim after discovering undeclared vehicle modifications. Mr M1 had answered 'no' when asked if the vehicle had been modified, but Ageas later identified modifications including flared wheel arches, bonnet bulge, non-standard grille, canopy, and nudge bars. Mr M1 argued the modifications were manufacturer-approved standard features for a higher-specification trim and that the policy failed to define 'original manufacturer's specification'. The ombudsman found that Mr M1 failed to make a fair presentation of the risk under the Insurance Act 2015, as the modifications constituted optional extras and bodywork changes as defined in Ageas' documentation, and that Ageas would not have offered cover had they been disclosed. The complaint was not upheld, and Ageas' actions of policy avoidance and premium refund were found to be compliant with the Act.

The Ombudsman's reasoning

The ombudsman found that Mr M1 failed to make a fair presentation of the risk under the Insurance Act 2015 by not declaring modifications. Although the modifications were manufacturer-approved and licensed, they constituted optional extras and changes to bodywork as defined in Ageas' policy documentation. The ombudsman determined that optional extras by definition are not part of the standard manufacturer specification. The clear question asked at inception ('Does the van have any modifications?') combined with the policy's definition of modifications meant Mr M1 ought reasonably to have appreciated the disclosure obligation. Ageas' actions of avoiding the policy and returning premiums were compliant with the Act's remedies for non-deliberate and non-reckless breaches where the insurer would not have offered cover.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website