Case study – Michelle – Insurer refusing to pay out on a claim

In 2009, the case of arson victim Michelle Hooley made front-page national news. A short and tumultuous marriage led to her request for divorce. When her estranged husband burned down her house, her insurers saved the day.

After 18 months in temporary accommodation with her children, an anonymous phone call informed the insurer that, four years before taking out the policy, Hooley had received a £150 fine for “unknowingly providing incorrect information to the benefits office”. She had never been to court and the police had not been involved. It never occurred to her that she should inform her insurers.

Yet, as a result, her policy was voided. Her insurer began proceedings against her to recover £240,000 and refused to pay the final tranche of £40,000 to the contracted builders for completed works.

That’s when she contacted Unlock. We worked with Michele, making sure she had the support of a lawyer who could help her make a strong application to the Financial Ombudsman Service (FOS). Ultimately, though the insurer’s legal position was secure, the FOS’s applied their broader standards which meant that the case was settled out of court.

 

Notes about this case study

This case study relates to Unlock’s Helpline.

Important links relating to this case study include information on insurance.

Names and details have been changed to protect the identity of those involved.

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