Can you really afford to use ‘money saving’ websites?

Any contract of insurance is subject to a duty of full disclosure on the parties - summed up with the Latin maxim uberrimae fidei meaning ‘the utmost good faith’.

The significance of this phrase became all too apparent to a Devon family when they returned from a holiday last Easter to find their home raised to the ground in a fire. Thankfully, they were insured… or so they thought! 

The family had bought a home insurance product through a price comparison website.  It was, however, the matched insurer’s practise not to provide cover on homes with more than five bedrooms.  Although the family’s home had seven ‘bedrooms’, they argued that their two attic rooms did not have building control approval for use as bedrooms, and, as such, were simply used for storage purposes. 

 The Financial Services Ombudsman, however, sided with the insurance company:

 ‘Taking a common sense approach, I think most people would consider upstairs rooms within a house as bedrooms.  Provided there was enough space for a bed, the room was heated and had a window. I don’t think that whether a room has been signed off as a building regulation compliant bedroom is relevant.’

Accordingly, the family’s losses were not covered.   

If you are buying insurance products online, please be sure to check the small print. Better still, use a broker to help match your needs with an appropriate policy. It could cost you if you don’t.

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