On 9 July 2017, you were driving your brother’s car, along the narrow street in front of your detached home. You were learning to drive, so you choose a very quiet and early Sunday morning for your training.
The law requires that, while training, you are provided with (i) a Provisional Driving license and (ii) a supervisor (as a driving instructor or as a family or friend with a UK/EU Driving License). So, you collect your Driving Licence and asked Mark, your US friend, and Florence, his French girlfriend to supervise you; you drove for 1-hour, meeting no one, and come back to your home, confident and relaxed.
Too relaxed, perhaps…
Consequently, while parking near your neighbour’s Jaguar, you hit its right side causing deep more paint scratches and a dented bumper. The very day you sent an email to your Insurance Company, summarizing the facts; you forgot to inform them that Florence was in the car. One month later it turned up that the Jaguar damages amounted to £20,000; your neighbour asked for compensation but you Insurance Company refused to provide indemnity.
According to the Insurance Company, you were driving your vehicle without a qualified supervising driver: Mark was provided with an International Driving Permit, which is not valid in the UK. You thought Mark could be your qualified passenger but he could not.
This means you were driving outside of the terms of your licence, so you were in breach of General Exception 1 of your policy which states “… You will not be covered for any liabilities you may have for any of the following: Any accident, injury, loss, theft or damage which happens while your car is ….driven by you if you do not hold a valid Driving Licence or are breaking the conditions of your Driving Licence”
Later you amended your statement and wrote to the Insurance Company that Florence, which owns an EU Driving License, was supervising you. Consequently, you asked the Insurance Company to revise its conclusions; so, the Company did but not as you expected.
The Insurance Company complained that you provided false information and accused you to have committed fraud, so not only denied indemnifying you but also terminated the Insurance Policy and asked you to pay £20,000 with no delay.
Could be argued that the Insurance Company has been too harsh and not totally fair in its refusal, as I will explain hereto.
The ABI (Association of British Insurers) Statement of General Insurance Practice requires firms not to repudiate a claim on the grounds: (i) of the customer's failure to disclose a material fact, if that fact was one that a customer could not reasonably be expected to disclose; or (ii) of misrepresentation, unless it is a deliberate or negligent misrepresentation of a material fact.
The same Statement also requires insurers: (i) to include clear questions on application forms about matters insurers have commonly found to be material; and (ii) not to ask questions requiring knowledge which the signatory could not reasonably be expected to possess. The insurer is entitled to forfeit these only if there is straightforward evidence of fraud.
In conclusion, in all case of innocent misrepresentation, in which you should ask a solicitor’s advice, you should have some argument against the Insurance Company which reject your indemnity request.
