Advantage Insurance Company Limited · DRN-6188290

The complaint Mr H has complained about Advantage Insurance Company Limited. He isn’t happy about the way it has dealt with and settled a claim under his motor insurance policy. Any reference to Advantage includes any agents that it is responsible for unless specified. What happened Mr H made a claim under his motor insurance policy, and his car was written off by Advantage. But when it looked to settle the claim and pay Mr H the market value of his car it noticed that Mr H hadn’t disclosed his true driving history and that there was minor pre- existing damage to his car. So, it looked to pay a proportionate settlement of his claim due to the misrepresentation and make a small deduction for the pre-existing damage. As Mr H wasn’t happy about this, the overall market value and the poor service he received he complained to Advantage. When Advantage looked into Mr H’s complaint it maintained its position that its deductions were reasonable, and it explained how it valued Mr H’s car which it felt was fair. But it did offer £100 compensation in acknowledgment of some delay and poor service provided. However, as Mr H remained unhappy, he complained to this Service. Our Investigator looked into things for Mr H, but he didn’t uphold his complaint. Although he understood Mr H’s position, he didn’t think Advantage had done anything wrong in the way it had valued Mr H’s car and applying a proportionate settlement. He did accept that the service could have been better, but he thought its offer of £100 compensation for this was fair. As Mr H didn’t agree the matter has been passed to me for review. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, although I can understand why Mr H feels that there shouldn’t be a deduction in his settlement, I don’t think Advantage has acted unfairly here. And its offer of £100 compensation for the poor service and inconvenience caused feels fair. I know Mr H will not be happy about this, but I’ll explain why. Whilst I’ve considered all the information, I haven’t commented on it all. Instead, I’ve focussed on what I consider to be the crux of the complaint and most relevant to the outcome reached. This isn’t meant as a discourtesy but reflects the informal nature of our Service. Mr H seems to accept our Investigator’s position that Advantage paid a fair market value (before deductions) for his car so I will not go over this in detail here. But I will outline that I agree Advantage has acted fairly and in line with how this Service generally considers valuation cases like Mr H’s. It has shown that Mr H could look to buy a comparable car for the total market valuation it started from. And I note Mr H’s car was advertised for around the amount it valued his car for a few weeks before when Mr H bought the car – so I can’t say it has acted unfairly here.

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The problem here is that Advantage felt Mr H had made a misrepresentation when he took out the policy and so it looked to make a deduction of around 21% in the amount it would pay Mr H. This was because had it have known Mr H’s true driving history, that he had an SP30 speeding offence marked on his licence, then it would have charged him a higher premium by 21%. I know Mr H feels this is unfair and that Advantage should have checked his licence when he provided it, before the claim, rather than at the time of the incident but that isn’t how insurance generally works. The relevant law in this case is The Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA). This requires consumers to take reasonable care not to make a misrepresentation when taking out a consumer insurance contract (a policy). The standard of care is that of a reasonable consumer. And if a consumer fails to do this, the insurer has certain remedies provided the misrepresentation is - what CIDRA describes as - a qualifying misrepresentation. For it to be a qualifying misrepresentation the insurer has to show it would have offered the policy on different terms or not at all if the consumer hadn’t made the misrepresentation. CIDRA sets out a number of considerations for deciding whether the consumer failed to take reasonable care. And the remedy available to the insurer under CIDRA depends on whether the qualifying misrepresentation was deliberate or reckless, or careless. Advantage thinks Mr H failed to take reasonable care not to make a misrepresentation when he failed to tell it, when asked, that he had a motoring conviction or fixed penalty (SP30). I’ve looked at the question asked and it’s clear that Mr H should have told Advantage about the SP30 at the point of application and subsequent sale and Mr H didn’t take reasonable care here by not doing so. And as Mr H didn’t take reasonable care, I’ve gone on to consider what Advantage would have done had it have known the correct information. Advantage has provided evidence by way of its underwriting criteria which shows that it would have charged Mr H a higher premium had Mr H have disclosed his true driving history. And it has shown that it would have charged Mr H 21% more in premium had he have told it that at the time he took out the policy. I know Mr H feels Advantage could have checked his licence when he provided details after the policy was taken out but I wouldn’t expect it to. And the onus was on Mr H to ensure he answered Advantage’s question which was clear (Have you committed any driving offences or had any Fixed Penalty Notices in the last 5 years?) and he could have asked or checked with Advantage if he was in doubt. Plus, Advantage made it clear that ‘If you don’t tell your insurer about previous offences your car insurance may not pay out if you make a claim.’ So, I can’t say it has acted unfairly here. Ultimately, this means I’m satisfied that Mr H’s misrepresentation was a qualifying one. And I can see that Advantage have classified Mr H’s misrepresentation as careless which feels fair. I say this as this is the most beneficial to Mr H so I’m not going to interfere with this. As I’m satisfied Mr H’s misrepresentation should be treated as careless, I’ve looked at the actions Advantage can take in accordance with CIDRA. And given that it has shown it would have charged an increased premium (around 21%) I agree that it can reduce the total loss payment proportionately in line with this. Turning to the small deduction in relation to the pre-existing damage I feel Advantage acted fairly and I’m not asking it to take any further action here. It is clear that there is a small amount of damage around the handle of Mr H’s car which isn’t accident related. And Advantage has shown how much it would cost to repair this, and it has reduced this cost by 50% in making the reduction from Mr H’s settlement which feels fair and in line with our general approach.

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Finally, I do accept that there was some poor service here and a short delay in looking to value Mr H’s car and settling the claim. But, as explained above, the claim wasn’t straight forward and there is always a fair degree of inconvenience in advancing insurance claims, so I think Advantage’s offer of £100 compensation feels fair. Plus, this award generally sits in line with the kind of awards this Service ordinarily makes. My final decision For the reasons set out above, I’ve decided not to uphold Mr H’s complaint. I’ll simply leave Advantage Insurance Company Limited to pay Mr H the £100 compensation if it hasn’t already. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr H to accept or reject my decision before 13 April 2026. Colin Keegan Ombudsman

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