Upheld: mis-selling and unfair claim decline complaint against Wakam UK Limited

Decision detail

Summary

Mr G purchased a motor insurance policy from Wakam in July 2025 for his self-employed maintenance business, selecting 'business use by the policyholder' and disclosing his profession. When he claimed after a motor incident in January 2026, Wakam voided the policy and declined the claim, arguing Mr G should have disclosed he carried work tools. The ombudsman found that Mr G made a fair presentation of risk and that Wakam failed to provide clear information about what business use was covered before the sale. Although the policy terms technically excluded tradespersons carrying work-related goods, this exclusion should have been clearly communicated during purchase. The ombudsman upheld the complaint, directing Wakam to treat the vehicle as a total loss, pay the claim, take over liability settlement, remove cancellation records, and pay £800 compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman found that Mr G made a fair presentation of risk by disclosing his profession and selecting 'business use by the policyholder', which should have alerted Wakam to make further enquiries. Therefore, no qualifying breach occurred under the Insurance Act 2015. While the policy terms technically excluded tradespersons carrying work-related goods, Wakam failed to provide clear information about what was and was not covered by the 'Business 1' policy before purchase. This constituted unfair treatment in the sale of the policy. Had Wakam provided clearer information, Mr G would likely have purchased a different policy that met his needs. Consequently, Wakam should cover the claim as if the policy had been properly sold. Wakam remains responsible for the sale despite using a third-party aggregator, as they had the opportunity to clarify or highlight policy aspects before Mr G purchased.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website