Upheld: Motor insurance, claim handling complaint against Liverpool Victoria Insurance Company Limited
Financial Ombudsman decision DRN-6370942 of 2026-06-23T00:00:00+00:00. Motor insurance, claim handling complaint against Liverpool Victoria Insurance Company Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6370942 |
|---|---|
| Decision date | 2026-06-23T00:00:00+00:00 |
| Firm | Liverpool Victoria Insurance Company Limited |
| Product | Motor insurance |
| Claim type | Motor insurance, claim handling |
| Outcome | Upheld |
| Remedy | LV must: (1) remove records of policy cancellation from internal and external databases or amend them to show customer-led cancellation; (2) pay simple interest at time-weighted average Bank of England base rate plus one percentage point on the refunded premium from the date of initial avoidance to the date of refund; (3) pay £300 compensation for distress and inconvenience within 28 days, with 8% simple interest if paid late. |
Summary
Ms K purchased car insurance from LV online. After her car was involved in a collision, LV discovered modifications (wheel colour changes, tinted windows, badge colour changes) during inspection and voided her policy from inception, refusing her claim. Ms K stated she was unaware of the modifications. The ombudsman upheld her complaint, finding that LV failed to prove Ms K knew about the modifications or failed to take reasonable care in answering the disclosure question, as the modifications were subtle and similar to manufacturer fitments. LV was directed to remove cancellation records, pay interest on the refunded premium, and pay £300 compensation for distress and inconvenience.
The Ombudsman's reasoning
Under CIDRA, a qualifying misrepresentation requires the insurer to show the consumer failed to take reasonable care and that the misrepresentation would have affected the insurer's decision. While LV established it would not have covered the car if aware of modifications (qualifying misrepresentation), it failed to prove Ms K knew about the modifications or failed to take reasonable care. The modifications were subtle and similar to manufacturer fitments, and there was no evidence Ms K was reasonably aware of them. Therefore, Ms K took reasonable care in answering the disclosure question, and the policy cancellation was unjustified.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Liverpool Victoria Insurance Company Limited, all decisions | 1,952 | 27% |
| Motor insurance, claim handling, all decisions | 12,937 | 32% |
| Motor insurance, all decisions | 24,103 | 35% |
Source
Read the original decision on the Financial Ombudsman Service website