Upheld: mis-selling of buildings insurance through non-disclosure and failure to properly advise on material information complaint against Personal Touch Financial Services Limited trading as PRIMIS Mortgage Network

Decision detail

Summary

Mr and Mrs M purchased a buildings insurance policy through Primis in July 2021 as part of their mortgage process. When Mrs M asked whether historic property movement would affect insurance, the Primis agent incorrectly stated it would not be a concern. The insurance application form was completed answering 'no' to questions about movement and subsidence. When Mr and Mrs M later claimed for structural movement in their kitchen extension, the insurer declined the claim, stating it would not have offered cover had the movement been disclosed. Primis conceded the agent's error but disputed whether financial loss had been caused. The ombudsman upheld the complaint, finding Primis should have properly advised on the materiality of historic movement and that Mr and Mrs M would likely have obtained specialist cover. Primis was ordered to identify an appropriate specialist policy, appoint loss adjusters to determine the cause of movement, and pay £1000 compensation.

The Ombudsman's reasoning

The regulator's rules required Primis to take reasonable care to ensure suitability of advice. Primis should have been aware that historic movement was relevant to the insurer. The misrepresentation was qualifying because the insurer would not have offered cover with correct information. It is reasonable to assume Mr and Mrs M would have sought alternative cover that would have responded to a subsidence claim, as this was required by the mortgage condition. The fair resolution requires establishing the cause of movement through a loss adjuster before determining financial redress.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website