Not upheld: policy avoidance for misrepresentation; failure to disclose pending prosecution complaint against Zurich Insurance Company Limited

Decision detail

Summary

Mr Y complained that Zurich unfairly avoided his motor insurance policy and 36 other policies after discovering he had a pending prosecution for a motoring offence at the time of policy inception. Mr Y argued the application did not ask about pending prosecutions and he was not shown the Proposer Declaration. The ombudsman found that Mr Y was required to agree the Proposer Declaration as the final step of the application process, which explicitly required him to declare he had no pending prosecutions. A reasonable consumer would have read this carefully, particularly given prior warnings and Mr Y's experience with 31 previous policies via the same intermediary. The ombudsman concluded Mr Y made a careless misrepresentation and Zurich was entitled to avoid the policy under CIDRA 2012, as the declaration was an absolute requirement for cover. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA). The key issue was whether Mr Y made a misrepresentation. The ombudsman found that: (1) Mr Y was required to agree the Proposer Declaration as the final step of the application process; (2) a reasonable consumer would have read the declaration carefully, particularly given the warning in the eligibility criteria; (3) Mr Y had agreed this declaration 31 times previously; (4) Mr Y was aware of the pending prosecution before taking out his first policy in October 2024; (5) therefore Mr Y made a careless misrepresentation by agreeing he had no pending prosecutions when he did. Under CIDRA, because Zurich's declaration was an absolute requirement and Zurich would not have offered cover if it had known the true position, Zurich was entitled to avoid the policy. The ombudsman considered Zurich's agreement not to pursue Mr Y for costs beyond his premiums to be fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website