Mulsanne Insurance Company Limited · DRN-6239594

The complaint Mr and Mrs W have complained that their motor insurer, Mulsanne Insurance Company Limited (‘Mulsanne’), turned down a claim they made on their policy after Mr W was involved in a road traffic accident. All references to Mulsanne include its agents. What happened In June 2025 Mr W was involved in a road traffic accident which resulted in him being injured and the car being a total loss. Mr and Mrs W made a claim on their motor insurance policy. Mulsanne arranged for Mr W to be interviewed in order to validate the claim. After the interview, it wrote to Mr and Mrs W and said it wouldn’t indemnify them because the car was used for business purposes, something the policy didn’t cover. It said this meant that it wouldn’t be covering the vehicle damage claim and would also seek reimbursement of any third-party claim from them. Mr and Mrs W didn’t agree and complained. Mulsanne didn’t uphold the complaint and said that Mr W had agreed that he was attending a work event and that this was outside the agreed terms of the policy cover because it was business use. Unhappy with Mulsanne’s response, Mr and Mrs W brought their complaint to our service. They said Mr W was attending a birthday party for a colleague and that they wanted Mulsanne to cover the claim. They also said they rented a replacement car for several months for £170 per month and wanted those costs reimbursed. One of our investigators considered the complaint but didn’t think that Mr W had been using the car for business purposes. So our investigator thought the complaint should be upheld. While the complaint was with our service, Mulsanne said that the car was not owned by Mr and Mrs W but by a company of which Mrs W is the sole director. It added that the car was, therefore, a commercially owned car used for commercial use. It said that Mr and Mrs W failed to declare this when taking out the policy and had they done so, it would have charged 20% more for the premium. Our investigator reviewed the complaint again and thought that Mulsanne should deal with Mr and Mrs W’s claim under the remaining terms and conditions. As it was suggested that the car was a total loss, it should pay its market value plus interest. Nevertheless, she thought the claim should be settled proportionately and as Mulsanne would have provided the policy for 20% higher premium it could deduct 20% from the settlement. Our investigator

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also thought Mulsanne should pay Mr and Mrs W £400 for the distress and inconvenience it caused them and for the cost of the hire car plus interest. Mulsanne insisted that Mr W accepted that he’d used the car outside the terms of his cover and that indemnity was fairly refused. It asked for an ombudsman’s decision and the matter was then passed to me to decide. 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. Business use Mr and Mrs W’s policy covers them for social, domestic and pleasure purposes plus commuting. Under the policy terms, Mulsanne will not cover any injury, loss or damage caused while the car is being driven or used for a purpose not allowed by the certificate of motor insurance. I have considered the interview Mulsanne relied on and I am not persuaded there is evidence that Mr W was using the car for business purposes. Mr W said he was attending a colleague’s birthday party, then gave others a lift home and was heading home himself when the accident happened. I don’t think attending a birthday party for a colleague would amount to business use which typically involves travel between different work locations. I haven’t seen evidence to persuade me Mr W was travelling to a place of work. Mulsanne said that in a statement it took from Mr W he said he was attending a birthday celebration for a colleague and that he was attending in a business capacity as his role is business retention and sales. I have taken this into account but I find the call more persuasive because it is in Mr W’s own words rather than a statement prepared by someone else. Also, Mr W clarified that his role of business retention and sales was to ensure clients who hadn’t used his services recently were contacted to ensure all was ok. As he was attending a birthday party for a colleague, I am not sure how this would be relevant to his sales role. I think it is more likely than not that this was a social rather than a business event. It follows that I think the car was used in line with the policy cover (social, domestic and pleasure plus commuting) and that Mulsanne should have provided indemnity with regards to the accident. Misrepresentation 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.

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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. Mulsanne thinks Mr and Mrs W failed to take reasonable care not to make a misrepresentation when they failed to declare that the car was owned by a company and not themselves when taking the policy out. Mulsanne said it no longer had access to the questions Mr and Mrs W were asked when they initially took the policy out in 2023, and the same applies to the renewal sales journey. It provided a screenshot which showed that Mr and Mrs W will have been presented with a statement saying that their policy could be invalidated if any of the information provided was not accurate. The Statement of Fact documents for 2023 and 2024 show the owner and registered keeper as Mr W. Ideally I would have liked to have been provided with the question Mr and Mrs W were asked in relation to vehicle ownership but as this isn’t available, I am able to look at supporting documents. As I said above, the Statement of Fact clearly indicates that the owner and registered keeper was Mr W. Mr W said that the car had been originally purchased by Mrs W and then purchased from her by the company she is the director of. So, Mr W was at no point the owner or registered keeper. The Statement of Fact documents also clearly state that Mr and Mrs W should carefully consider the information provided and if it is not accurate to contact Mulsanne immediately otherwise their insurance may not protect them in the event of a claim. There is no indication that Mr and Mrs W did so. For this reason, on balance, I don’t think Mr and Mrs W took reasonable care not to make a misrepresentation. Mulsanne provided underwriting criteria which shows that if it had been aware that the owner and registered keeper was a limited company it would have charged a higher premium. This means I am satisfied that Mr and Mrs W’s misrepresentation was a qualifying one. Mulsanne didn’t say what type of misrepresentation it considered this to be but the actions it took suggests that it thought it was careless. And I say this because if it considered it to be reckless or deliberate, it would have taken different action including avoiding the policy. I agree that any misrepresentation was careless and I say this because Mr W readily disclosed the fact that the car was owned by Mrs W’s business when he was being interviewed. And he provided details as to the ownership transfer from Mrs W to the business. As I’m satisfied Mr and Mrs W’s misrepresentation should be treated as careless, I’ve looked at the actions Mulsanne can take in accordance with CIDRA. Where the qualifying misrepresentation is careless and there has been a claim and the policy would have still been offered but for a higher premium, Mulsanne may reduce proportionately the amount to be paid on the claim. So I think this is what it must do now. Other expenses and distress and inconvenience

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As I mentioned above, I didn’t think Mr W was using the car for business purposes at the time of the accident. I thought it was more for social purposes. Mulsanne relied on a witness statement which doesn’t quite reflect what was mentioned by Mr W in the call he had with its agent. I agree that Mr W should have been more careful before signing the statement. But at the same time I think it was unreasonable for Mulsanne to suggest that attending a work colleague’s party was business use. This led to delays and a fair amount of distress and inconvenience for Mr and Mrs W. On top of no longer having their car, they also had to find a replacement so that they could carry on with their lives. I agree that £400 is a reasonable amount for this level of inconvenience which went on for many months. This is also in line with awards we make in similar circumstances. Mr and Mrs W said they had to hire a replacement car bearing in mind Mulsanne didn’t cover the claim. Mulsanne had said the car was likely a total loss so they weren’t able to repair it. They hired a replacement car through a friend between July 2025 and January 2026 at a total cost of £1,224. I think this is a very reasonable expense bearing in mind the monthly cost of £170. I say this because hire costs tend to be much higher, normally tens if not hundreds of pounds per day especially if provided through credit hire. So, on balance I think this cost is very reasonable. And as I think Mulsanne should have covered the claim, I think it should reimburse these costs. I have considered whether Mulsanne should pay 80% like the rest of the claim but I don’t think any deduction should be made. And I say this because this wasn’t a claim under the policy and it is also an expense that could have been avoided had Mulsanne dealt with the claim. For completeness I will add that as the vehicle is owned by Mrs W’s company and the hire costs were invoiced to the company, any payments for vehicle damage or hire expenses should be made to the legal owner/the party who incurred the financial loss. My final decision For the reasons above I have decided to uphold this complaint. Mulsanne Insurance Company Limited must: • Deal with the claim in line with the remaining terms of the policy and settle any claim proportionately by applying a 20% reduction. Mulsanne suggested that the car was a total loss and if that is the case it should pay 80% of the market value (subject to any policy deductions including the excess) and add 8% simple interest per year on the amount it pays from July 2025 to the date it settles the claim. I say July 2025 as we would have expected it to take no longer than a month to assess and deal with the claim. I note this payment may be made to the owner of the vehicle. • Pay the cost of the hire car (£1,224) subject to Mr and Mrs W/the owner of the car providing evidence in support of this cost being paid. Mulsanne must add 8% interest per year simple on the amount it pays from the date the hire costs were paid to the date of settlement. • Pay Mr and Mrs W £400 compensation for the distress and inconvenience it caused them. Mulsanne Insurance Company Limited must pay the compensation within 28 days of the

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date on which we tell it Mr and Mrs W accept my final decision. If it pays later than this it must also pay interest on it from the deadline date for settlement to the date of payment at 8% a year simple. If Mulsanne Insurance Company Limited considers that it’s required by HM Revenue & Customs to deduct income tax from that interest, it should tell Mr and Mrs W how much it’s taken off. It should also give Mr and Mrs W a tax deduction certificate if they ask for one so they can reclaim the tax from HM Revenue & Customs if appropriate. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr and Mrs W to accept or reject my decision before 24 April 2026. Anastasia Serdari Ombudsman

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