Not upheld: Travel / life insurance claim disputes complaint against Watford Insurance Company Europe Limited

Decision detail

Summary

Miss B complained that Watford Insurance Company Europe Limited unfairly declined her motor insurance claim and voided her policy after she had an accident. Watford had avoided the policy because Miss B incorrectly stated she was the registered keeper and legal owner of the car when in fact her father held both titles. The ombudsman found that although Miss B did not intend to deceive, she made a reckless qualifying misrepresentation under the Consumer Insurance (Disclosure and Representations) Act 2012 by failing to take reasonable care when answering a clear and specific question, particularly given the supporting information provided and the opportunity to correct the information in her Statement of Insurance. Since Watford's underwriting criteria showed they would not have offered cover if Miss B had answered correctly, they were entitled under CIDRA to avoid the policy and retain the premiums. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA) to determine whether Miss B took reasonable care not to make a misrepresentation. The question asked was clear and specific, with supporting information available. Miss B should have reasonably understood what was being asked and that the answer mattered to Watford. Although Miss B did not intend to deceive (so the misrepresentation was not deliberate), the ombudsman found it was reckless rather than careless because: (1) the question was unambiguous; (2) supporting information was provided; (3) being the main user is not the same as being registered keeper or legal owner; and (4) Miss B had the opportunity to correct the information in the Statement of Insurance but did not. The misrepresentation was qualifying because Watford's underwriting criteria showed they would not have offered cover if Miss B had answered correctly. Under CIDRA, Watford was therefore entitled to avoid the policy and retain premiums.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website