A very recent subsidence claim with Aviva has shown that being less than honest about one part of a claim, meant the insured lost the cover provided on the genuine part of a claim.
The following is a synopsis of the court ruling which resulted in the insured having to repay Aviva a substantial amount of money, after trying to squeeze an insurer for a little bit extra.
Aviva v Brown
In Aviva v Brown, Mr Brown had a genuine subsidence insurance claim relating to his property. His policy also provided cover for temporary housing whilst works were being undertaken. Mr Brown actually owned two other properties and suggested that he live in one of those properties whilst the work was being carried out to correct the subsidence issue. In the correspondence with the insurer Mr Brown did not disclose that he owned the other property and indicated that the property was owned by a third party, and he sought to recover a market rental for the property.
During this insurance claim Aviva investigated the position on his and on discovering that the property was owned by Mr Brown, demanded repayment of rental payments made and also the money already paid out under the subsidence claim, which was entirely genuine. The dispute went to court and the judge found that Mr Brown had made a fraudulent misrepresentation during the course of his insurance claim. It was irrelevant that he decided not to pursue the claim for rental of the property and that because the fraudulent misrepresentation had been made, Mr Brown forfeited all benefits under the policy, including the entirely genuine subsidence claim and had to repay money already paid by Aviva for the subsidence works.
Given the far reaching effects of a fraudulent statement, any allegation of fraud which is disputed by the insured ought to be vigorously denied, but where fraud is proven, clients need to be aware that they risk affecting their entire insurance claim and also their future ability to obtain insurance cover.
This overview has been kindly provided by our recommended insurance legal advisor www.clairecollinsonlegal.co.uk – if you need any insurance legal advice please get in touch and we can refer you on to her.