In October 2020, Mr W visited his tenanted house and then phoned his insurance broker saying it was “in a very bad state. The tenants were… ruining it quite badly –
the carpets, the walls, and everything.”
In January 2021, Mr W telephoned his broker and asked about his policy cover. He was told the cover didn’t cover malicious or intentional damage, only accidental damage by the tenants. The broker suggested he upgrade the policy so that it included malicious damage and loss of rent due to non-payment by tenants, which is what Mr W did.
A week later, Mr W’s wife inspected the house. Mr W contacted the broker to make a claim for the damage and loss of rent, stating the damage had only just been noticed and neglecting to mention he had first noticed it in October 2020.
The insurer declined the claim and cancelled the policy, on the basis that Mr W had not been honest. It said Mr W had upgraded the policy before making the claim, because he knew the damage wasn’t covered by his previous policy.
Mr W complained that he had been honest and transparent, and he did not understand the cover provided by the policy.
However, the IFSO Scheme found the policy allowed the insurer to decline a claim if statements Mr W made were not “complete and correct in all respects”.
Consequently, the insurer was able to decline the claim and cancel the policy