Upheld: Travel / life insurance claim disputes complaint against Lemonade Insurance N.V.

Decision detail

Summary

Miss R held a buildings and contents insurance policy with Lemonade Insurance N.V. and claimed for water damage in February 2025. Lemonade declined the claim and avoided the policy, alleging misrepresentation on three application questions: whether the property was her main residence, whether it would be unoccupied for 30+ days, and whether building work was in progress. The ombudsman found no qualifying misrepresentation under CIDRA because: (1) the property was Miss R's only owned property with imminent occupancy plans, making it reasonable to describe as her main residence; (2) the unoccupancy question lacked clarity about timing relative to policy inception; and (3) remaining work (tiling, electrical fittings, sanitaryware) would not reasonably be characterized as 'building work' by a reasonable consumer, particularly given the lack of definition in the question. The ombudsman upheld the complaint, directing Lemonade to remove avoidance markers, reassess the claim, and pay £1,000 compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman applied the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA), which requires consumers to take reasonable care not to misrepresent material facts. The test is whether a reasonable consumer would have answered the questions in the same way. On the main residence question, the property was Miss R's only owned property and she intended to move in imminently, making it reasonable to describe as her main residence despite not currently residing there. On unoccupancy, the question asked about future unoccupancy without specifying the timing relative to policy inception, and Miss R's expectation of moving in within 30 days was reasonable at application. On building work, while some work continued post-application, the structural work was substantially complete by October 2024, and the remaining work (tiling, electrical fittings, sanitaryware) would not reasonably be characterized as 'building work' by a reasonable consumer, particularly given the lack of definition in the question. The ombudsman found ambiguity in the question should be construed in the consumer's favour. Therefore, no qualifying misrepresentation existed under CIDRA, and Lemonade could not rely on misrepresentation to decline the claim or avoid the policy. Regarding delays and mould, although the policy was ultimately avoided, Lemonade should have handled the claim more proactively when Miss R raised health concerns about mould in April 2025.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website