Not upheld: breach of duty of fair presentation; fraudulent documentation; policy cancellation and premium retention complaint against Tradex Insurance Company PLC

Decision detail

Summary

Mr J complained that Tradex Insurance Company PLC unfairly cancelled his motor trade policy and retained his full premium. During validation checks, Tradex discovered that the proof of no claims discount Mr J provided was not genuine, and neither the broker nor insurer listed on the document could validate it. The ombudsman found that Mr J breached the duty of fair presentation under the Insurance Act 2015 by providing false information about his no claims discount. The ombudsman determined this was a qualifying deliberate or reckless breach, as Tradex's underwriter confirmed they would have offered a policy at a significantly higher premium had they known the correct information. Under the Insurance Act 2015, Tradex was entitled to cancel the policy and retain the full premium, and the ombudsman did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied the Insurance Act 2015, which requires a fair presentation of risk. Mr J breached this duty by providing incorrect information about his no claims discount through a non-genuine document. This constituted a qualifying breach, as Tradex would have offered a policy at a higher premium had they known the correct information. The breach was classified as deliberate or reckless, as Mr J either knew he was in breach or did not care whether he was. Under the Insurance Act 2015, an insurer can avoid the contract and retain premiums for a deliberate or reckless breach. Tradex's cancellation and premium retention was fair and reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website