Julie takes out pet insurance for her dog, Pixie
In April 2013 Julie took out a pet insurance policy with Action Animal Insurance (“Action Animal”) for her dog, Pixie. On 20 May 2014 Julie received a letter from Action Animal saying her policy had been cancelled because the premium for the new policy had not been paid.
On 11 June Julie telephoned Action Animal to say that there had been a misunderstanding and asked for the policy to be reinstated. Action Animal told her that it was too late and the policy had lapsed. Having been told that the policy could not be reinstated, Julie decided to apply for new insurance cover while on the telephone with Action Animal that day.
Julie received a letter from Action Animal dated 26 June declining her new insurance application on the basis of non-disclosure of Pixie’s medical history.
Julie made a complaint to FSCL about Action Animal’s decisions to not reinstate Pixie’s policy and to decline new insurance cover on the basis of non-disclosure of Pixie’s medical history.
Julie’s view
Julie had received a letter from Action Animal dated 11 March. From this letter Julie said that she understood that Pixie’s policy was coming up for renewal. However, she thought that the premium payment would automatically be charged to her credit card. Julie said she received no correspondence from Action Animal between 11 March and 20 May when she received the cancellation letter. Julie believed that she did not receive sufficient warnings from Action Animal before Pixie’s policy was cancelled. She wanted Action Animal to reinstate Pixie’s original policy.
Julie said that, if the policy was not reinstated, then Action Animal’s decision to decline her new application on the basis for non-disclosure would affect her ability to seek further insurance. Julie believed she fully disclosed Pixie’s medical history and answered all questions truthfully during the telephone discussion on 11 June.
Action Animal’s view
Action Animal said that its renewal notice dated 11 March clearly stated that if paying an annual premium the remittance advice needed to be completed and returned. Action Animal said it sent a cancellation warning notice to Julie’s address on 2 May and also telephoned and left a message on 13 May before sending the cancellation letter on 20 May.
Action Animal said it decided to decline to accept Julie’s new insurance application on the basis of non-disclosure of information about Pixie’s medical history.
FSCL’s view:
Was Action Animal entitled to cancel and not reinstate the policy?
We agreed that the renewal letter dated 11 March clearly provided that the remittance advice needed to be completed and returned. It was unfortunate that Julie misread the letter but this was not Action Animal’s fault.
Julie said that she did not receive the cancellation warning letter dated 2 May. We saw no reason why Julie would not receive this letter which was sent to the same address as the other two letters she received. Julie acknowledged that the telephone number she provided to Action Animal was incorrect.
A combination of Julie misunderstanding the information provided to her by Animal Action and the fact she gave Action Animal an incorrect telephone number lead to the unfortunate situation Julie found herself in. We considered that Action Animal had taken all reasonable action to warn Julie about the cancellation of Pixie’s policy.
Action Animal was entitled to cancel the policy.
Was Action Animal correct when it declined Julie’s application for new insurance cover on the basis of non-disclosure?
Action Animal’s decision not to reinstate Pixie’s policy meant that any pre-existing medical conditions would not be covered. Pixie had visited the vet in November 2013 with symptoms of lameness.
In our view, Julie sufficiently disclosed Pixie’s to Action Animal during the telephone discussion on 11 June. Julie also satisfied her duty of disclosure by giving her permission for Action Animal to seek Pixie’s medical records. The transcript of the telephone recording showed that Action Animal indicated that it was going to review Pixie’s medical records before making a decision on whether cover was going to be provided.
We found that Julie had satisfied her duty of disclosure and it was incorrect for Action Animal to decline to provide Julie with further cover on the basis of non-disclosure.
We recommended that Action Animal retracted its decline letter. If Julie wanted to proceed with seeking new insurance cover from Action Animal, then we recommended that Action Animal should re-assess whether to provide insurance cover on the basis of Pixie’s medical history and inform Julie of any exclusions/conditions of that cover for her to consider.
