Upheld: unfair claim settlement based on alleged misrepresentation; failure to clearly define policy terms complaint against Advantage Insurance Company Limited
Financial Ombudsman decision DRN-6361296 of 2026-05-14T00:00:00+00:00. unfair claim settlement based on alleged misrepresentation; failure to clearly define policy terms complaint against Advantage Insurance Company Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6361296 |
|---|---|
| Decision date | 2026-05-14T00:00:00+00:00 |
| Firm | Advantage Insurance Company Limited |
| Product | home insurance |
| Claim type | unfair claim settlement based on alleged misrepresentation; failure to clearly define policy terms |
| Outcome | Upheld |
| Remedy | Advantage Insurance Company Limited must: (1) Pay Mr C the difference between what they have paid and the total claim settlement Mr C would be entitled to without proportionate settlement; (2) Pay 8% simple interest on the difference between the interim settlement amount and total claim entitlement, calculated from the date Mr C accepted the interim payment until full settlement; (3) Pay £2,500 compensation for distress and inconvenience. |
Summary
Mr C and Mrs C complained about how Advantage Insurance handled their fire damage claim. Advantage identified a discrepancy in the number of bathrooms disclosed (Mr C stated one, but the property had one bathroom, two ensuites, and a downstairs WC) and applied a proportionate settlement reducing the claim to 82.77%. The ombudsman found that the term 'bathroom' without further explanation does not have a sufficiently clear meaning and that Advantage failed to clearly communicate their specific interpretation at the 2016 sale or 2024 renewal. Consequently, Mr C took reasonable care and did not make a qualifying misrepresentation under CIDRA. The complaint was upheld, and Advantage was directed to pay the full claim settlement plus interest and £2,500 compensation.
The Ombudsman's reasoning
The ombudsman applied the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA), which requires consumers to take reasonable care not to make misrepresentations. The test is whether a reasonable consumer would have given the same answer. The ombudsman found that the term 'bathroom' on its own, without further explanation, does not have a sufficiently clear meaning. The fact that Advantage provided clarifying language in 2018 questions demonstrates the question alone is ambiguous. At the 2024 renewal, the Statement of Fact contained no clarification of what Advantage considered a bathroom to be, so a reasonable consumer would not have been alerted to any inaccuracy. Therefore, Mr C took reasonable care and did not make a qualifying misrepresentation under CIDRA.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Advantage Insurance Company Limited, all decisions | 1,756 | 40% |
Source
Read the original decision on the Financial Ombudsman Service website