FSPO – Decision Ref: 2019-0145 – Rejection of Claim due to non-disclosure
The complaint relates to the Insurers declinature of a claim and a cancellation of a household insurance policy held by the Complainant due to non-disclosure.
The Complainants Case
The Complainant is unhappy that her house insurance policy was cancelled ab initio due to an unintentional omission relating to a previous claim. The Complainant sought a quote from an insurance intermediary and the intermediary offered a quote which was lower than the Complainant had been paying previously, the quotation was accepted by the policyholder and the policy was incepted from the 1st of October 2014. In February 2015, the Complainant registered a claim for a shower pump and subsequently received notification from Insurers advising that, as the Complainant had omitted to disclose a previous claim dating back several years, the clam was declined. In addition to this, the Complainants house insurance policy was cancelled ab initio “with immediate effect dating back to October 01st 2014” due to non-disclosure of a claim.
The Complainant states that as her father-in-law was dying of cancer at the time, she was preoccupied with arranging care for him, therefore she forgot to include the details of the previous claim. The Complainant further states that she genuinely didn’t think of it as a claim and also thought that it was over 5 years old and that she would not lie about a claim she knew needed to be declared.
The Complainant is unhappy that, as a result of this omission, she has been unable to get competitive house insurance quotes and finds it hard to even get quotes. The Complainant would like the Insurer to amend her record in relation to the cancellation ab initio of her house insurance policy with the aim of obtaining competitive quotes in the future.
The Insurers Case
The Insurer states that the Complainant failed to disclose material fact prior to the inspection of the policy in October 2014, on her Statement of Fact document, a claim made on her house insurance policy in April 2011 which was settled for €1,108.30. The Insurer maintains that this represented non-disclosure of a material fact which entitled it to deem the policy void ab initio. The Insurer also maintains that, had the previous claim been disclosed, insurance terms would have been refused on the basis the Complainant had two claims on her house insurance policy in the 5 years immediately prior to inception.
Statement of Fact
The insurer relies upon certain passages of the Statement of Fact document completed by the Complainant in October 2014. This document, which is expressly stated to form the basis of the contract, includes a section entitled “Previous Insurance History”. The section requests disclosure of “ any claims/material losses incurred in the last 5 years”
The section also states as follows in bold:
NOTE: Failure to disclose previous claims/material losses may invalidate this insurance policy. We may request information about you and your claims history and / or share information we hold about you and your claims history with other insurance companies.
Elsewhere, in the ‘Declarations section, the document states:
Please note that we are providing insurance to you on the basis that you have confirmed the following statements to be true. The policy details supplied in the statement set below form the basis of the insurance contract between us. Incorrect information could invalidate all or part of the policy and or result in a claim not been paid.
In addressing the previous insurance history section of the Statement of Fact, the Complainant disclosed details of an accidental damage claim made in December 2012 and no reference of the claim made in April 2011.
The FSPO state that because the Complainant failed to disclose a previous claim at inception of the policy, for whatever reason, the Insurer is entitled to deem the policy void ab initio in the event that this non-disclosure related to a material fact. A material fact is one which would have influenced a reasonable Insurer had it been disclosed.
The FSPO accepts that it was reasonable from the evidence provided that the Insurer was entitled to decline the Complainants claim and to cancel the policy ab initio.
The FSPO does not uphold this complaint.