Partially upheld: unfair policy cancellation and customer service failures complaint against Tesco Underwriting Limited

Decision detail

Summary

Mr and Mrs C complained that Tesco unfairly cancelled their home insurance policy after Mrs C disclosed that Mr C would work abroad from August 2024 and they would only occupy the property every three months. Tesco's underwriting team required further information to assess the changed risk and attempted to contact Mr C multiple times via text, email, letter, and phone, but Mr C did not respond. Tesco issued a seven-day cancellation notice on 21 August 2024 via multiple channels and cancelled the policy on 28 August 2024. The ombudsman found the cancellation was fair and in line with policy terms, as Mr C failed to cooperate with the underwriting process. However, the complaint was upheld regarding customer service failures where promised call backs did not occur, and the ombudsman upheld Tesco's offer of £50 compensation for these failures.

The Ombudsman's reasoning

The ombudsman found that Tesco acted fairly in cancelling the policy because: (1) the change in circumstances (extended absence from the property) was a fundamental change to the risk requiring underwriting assessment; (2) Tesco made reasonable efforts to contact Mr C through multiple channels (text, email, letter, phone, and online portal); (3) Tesco provided the required seven days' written notice of cancellation as stipulated in the policy terms; (4) Mr C received the cancellation notice via email but did not contact Tesco until the day of cancellation despite having seven days to respond; and (5) the policy terms do not require notice to be given at any particular time of year. However, the ombudsman upheld the complaint regarding customer service failures where promised call backs did not occur, finding the £50 compensation offered to be reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website