Not upheld: proportionate claim settlement following material change in risk complaint against HDI Global Specialty SE

Decision detail

Summary

Mrs L held a landlord insurance policy with HDI covering a rental property. Following a criminal damage claim in 2023, HDI discovered that the tenant's employment circumstances had changed from self-employed to unemployed and receiving benefits. HDI concluded this was a material change in risk that should have been reported and proposed to settle the claim proportionately rather than in full. Mrs L complained that she did not realise the change needed to be reported and had not intentionally withheld information. The Ombudsman found that HDI's policy terms requiring notification of material changes were standard, that HDI had underwriting evidence supporting their pricing decision, and that Mrs L was aware a change had occurred. Therefore, the complaint was not upheld.

The Ombudsman's reasoning

The Ombudsman found that the policy terms requiring notification of material changes were common and fairly applied. HDI demonstrated through underwriting evidence that the tenant's employment status materially affected the risk and their pricing. Mrs L was aware that a change had occurred (tenant stopped trading several months earlier) and the policy terms required her to notify HDI of this change. Therefore, HDI acted fairly in applying the proportionate settlement clause.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website