Upheld: Travel / life insurance claim disputes complaint against Admiral Insurance (Gibraltar) Limited

Decision detail

Summary

Mr S claimed under his pet insurance policy after his dog died in an accident, but Admiral declined the claim because Mr S had declared the purchase price as £0 when taking out the policy two years earlier, despite actually paying £2,700. The ombudsman found Mr S made a careless misrepresentation (likely a typing error) that qualified under CIDRA, as Admiral would have charged a higher premium had the correct price been declared. However, rather than declining the claim entirely, CIDRA requires proportional settlement where a careless misrepresentation occurs. Since Mr S paid 86% of the correct premium, the ombudsman directed Admiral to pay 86% of the claim plus interest and £250 compensation, finding Admiral's complete denial was unfair under ICOBS, particularly given Mr S's good faith premium payments and the distress caused during his grief.

The Ombudsman's reasoning

The ombudsman found that Mr S made a qualifying misrepresentation by declaring a £0 purchase price when he actually paid £2,700. However, the misrepresentation was careless (likely a typing error) rather than deliberate, as evidenced by the minimal financial benefit (£5/month saving) and Mr S's correct declaration of his other dog's purchase price. Under CIDRA, where a careless qualifying misrepresentation occurs and a higher premium would have been charged, the remedy is proportional settlement. Since Mr S paid 86% of the correct premium, Admiral must pay 86% of the claim. The ombudsman rejected Admiral's position of paying £0, finding this would be an unfair claim decline under ICOBS, particularly given Mr S paid premiums in good faith and was grieving his pet's unexpected death.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website