Ralph contacted us about unfair price changes to his insurance policy after providing incorrect information.
Ralph’s insurer asked for additional premium after it discovered he hadn’t mentioned that he had 3 points on his driving licence when he bought his car insurance.
He accepted he hadn’t taken enough care when giving the answer, but thought it was unfair that he was being chased by debt collectors because he hadn’t paid the additional premium, so he complained to his insurer.
Unhappy with the outcome, Ralph contacted our service to make a complaint.
What we said
We established when Ralph bought his policy, he hadn’t mentioned the 3 points on his licence when he was asked if he had any points in the last five years.
We also found the insurer discovered this information 4 weeks after the policy had started. The insurer had accepted Ralph’s explanation that he thought the points had ‘dropped off’ his licence after three years, and he hadn’t checked this before incorrectly answering the question.
We explained the Consumer Insurance Disclosure and Representations (CIDRA) Act 2012 sets out what an insurer can do when there’s a qualifying misrepresentation and where there is no claim under the policy – as in Ralph’s case.
Although we accepted the insurer would have charged a higher amount had it known about the 3 points, CIDRA didn’t allow the insurer to pressure Ralph to pay that amount.
The insurer could have told Ralph it would only settle future claims proportionately to the amount he’d paid – in which case Ralph could have continued or cancelled his policy. Or it could have said it was going to cancel his policy and give him reasonable notice. But what the insurer couldn’t do was force Ralph to pay the additional premium.
In the end, the insurer and Ralph agreed that he’d pay the additional amount to keep his policy going. We asked the insurer to offer £150 compensation for the distress it had caused by getting debt collectors involved when it shouldn't have.
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