Not upheld: Travel / life insurance claim disputes complaint against Aviva Insurance Limited

Decision detail

Summary

Mr D and Mr H complained that Aviva Insurance Limited unfairly declined their van insurance claim and avoided their policy after the van was stolen. Aviva discovered during claim validation that the vehicle was registered to Mr D's company, not owned by Mr H as he had indicated when agreeing to the policy's assumptions. The ombudsman determined that CIDRA applied rather than the Insurance Act 2015 since the policy was for personal use. The ombudsman found Mr H failed to take reasonable care when answering a clear question about vehicle ownership, constituting a careless misrepresentation. As Aviva's underwriting evidence showed they would not have offered the policy with correct information, this was a qualifying misrepresentation. The ombudsman upheld Aviva's decision to decline the claim and avoid the policy, finding their actions fair and in accordance with CIDRA.

The Ombudsman's reasoning

The ombudsman applied CIDRA rather than the Insurance Act 2015, as the policy was for personal use. Under CIDRA, consumers must take reasonable care not to misrepresent facts when taking out insurance. The question about vehicle ownership was clear, and Mr H answered it incorrectly by agreeing the vehicle was owned by him or a close family member when it was actually registered to Mr D's company. This constituted a careless misrepresentation. Aviva's underwriting evidence demonstrated they would not have offered the policy had the correct information been provided, making it a qualifying misrepresentation. The remedy applied by Aviva (declining the claim and avoiding the policy with premium refund) is consistent with CIDRA's provisions for careless misrepresentation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website