Upheld: Travel / life insurance claim disputes complaint against Tesco Underwriting Limited

Decision detail

Summary

Miss K complained that Tesco unfairly declined her motor insurance claim and cancelled her policy following the theft and crash of her insured vehicle. Her son, a named driver, initially gave a false explanation of the theft (carjacking) but Miss K corrected this within 24 hours, explaining that car keys had been stolen from his jacket. Tesco declined the claim citing the false information and cancelled the policy claiming Miss K's son was the main driver, not a named driver as stated. The ombudsman upheld the complaint, finding no qualifying misrepresentation under CIDRA 2012 because the son's car use was irregular and unnecessary when the policy was taken out, and the claim decline was unfair given the prompt correction and that theft was covered. Tesco was ordered to reconsider the claim, remove cancellation records, and pay £400 compensation.

The Ombudsman's reasoning

Under CIDRA 2012, a misrepresentation must be a qualifying misrepresentation for an insurer to take action. The ombudsman found no misrepresentation occurred because Miss K's son's use of the car was irregular and agency-based, and he did not require the car when the policy was taken out in March 2025. Regarding the claim decline, Miss K did not make a false statement but relayed what she understood to be true based on her son's account. She corrected this within 24 hours. The policy terms allow claim decline for false statements, but the ombudsman found this was not fairly applied given the prompt correction and the fact that theft was covered under the policy. Tesco failed to adequately investigate by obtaining police reports or witness statements.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website