Advantage Insurance Company Limited · DRN-6320845

The complaint Miss C has complained about Advantage Insurance Company Limited’s decision to charge her an additional premium when it discovered she did not have a two year no claim discount (NCD). Any reference to Advantage includes its trading name. What happened Miss C took out a policy with Advantage in January 2025. When she did so she said she had an NCD of two years. Advantage asked Miss C to provide proof of her NCD in October 2025. Miss C then provided a proof of two years’ NCD in her partner’s name. Advantage then said this wasn’t valid and amended Miss C’s premium to reflect the fact that she didn’t have any NCD. It then charged her the extra amount due. Miss C refused to pay the additional amount due, so Advantage cancelled her policy. Miss C complained to Advantage on the basis that she had thought she could benefit from the fact she had been a named driver on a multi-car policy with her previous insurer which had a two year no claim discount. But Advantage didn’t alter its position. Miss C asked us to consider her complaint. One of our investigators did this. She originally upheld it on the basis Advantage had not made it clear enough in the online process Miss C went through to take out the policy that she could only use an NCD earned as a policyholder. But when Advantage provided a copy of a Demands and Needs notice which was displayed for Miss C to check before she accepted the quote and went ahead with the policy online, the investigator changed her mind and decided that Miss C’s complaint should not be upheld. This was because in the notice it said that a policyholder could only claim an NCD if it had been earned as a policyholder of another policy. Miss C didn’t accept the investigator’s view and asked for an ombudsman’s decision. She said that she was entitled to think she could benefit from two years’ NCD earned as a named driver because there is a direct contradiction between the ‘public marketing material’ on Advantage’s website and what appeared in the Demands and Needs notice. She also said that the reference to an NCD having to be “earned in your name (as a policyholder) is ambiguous because it gives the impression that named drivers are able to earn an NCD as they are not explicitly excluded. And that it does say on Advantage’s website that named drivers on a company car policy can earn an NCD. Miss C also said that the fact that the information in the pop up with the question about NCD makes no reference to it needing to be earned as a policyholder and the fact that the Demands and Needs notice was only introduced at the ‘nearly there’ stage, means Advantage failed in its duty to be transparent. Miss C also said that Advantage had only provided evidence that the notice appeared in the online journey of taking out a policy in 2026 and not in January 2025 when she took her policy out. Overall, Miss C thought she did take reasonable care not to make a misrepresentation about her NCD when taking out the policy and that this means Advantage acted in appropriately in amending her premium.

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I issued a provisional decision on 9 April 2026 in which I set out what I’d provisionally decided and why as follows: I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. The first thing I want to say is that I am concerned by how late in the policy year Advantage asked Miss C to provide proof of her NCD. It did this around ten months into a 12 month policy period, which I find surprising and less than satisfactory. Especially because, I assume when Advantage revised the premium it revised it for the year as a whole and not just for the remaining two months. The problem with this approach is that this then means if the customer doesn’t want to pay the extra they have wasted a significant period of time spent toward earning an NCD. And, while Advantage might argue the customer could avoid this by declaring the right level of NCD when taking the policy out, the reality is that people make mistakes and it is better for an insurer to carry out checks as soon as possible after the policy is taken out to highlight these. However, this does not alter the fact that when taking out the policy Miss C, as a consumer, had a responsibility to take reasonable care not to make a misrepresentation when providing Advantage with information. This is in accordance with her responsibilities under the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA). If she failed to do this, and Advantage can show it was what the Act describes as a qualifying misrepresentation, it will have certain remedies available to it. However, these do not include charging an additional premium; something I will return to later. I appreciate Advantage did not mention or seemingly take into account CIDRA when it discovered Miss C didn’t have two years’ NCD. But it should have done, as her saying she did have two years’ NCD was clearly a misrepresentation and Advantage should have realised this and considered its options in light of it. So the first question for me to consider is whether Advantage has shown that when taking out the policy Miss C did fail to take reasonable care not to make a misrepresentation regarding her NCD. In considering this, I have taken into account Miss C’s comments. And she is right to refer to the explanatory material about NCDs on Advantage’s website. This is because CIDRA does say this needs to be taken into account when deciding whether a consumer has taken reasonable care not to make a misrepresentation. CIDRA also says that the standard of care required is that of a reasonable consumer. I agree with Miss C that it is poor that Advantage’s explanatory material about NCDs doesn’t mention at all that an NCD needs to be earned as a policyholder. This is mentioned in the section on its website relating to car insurance entitled ‘Acceptance Criteria’, but I think it should be in the section on NCDs. It is also unsatisfactory that the information box with the question about the NCD in the online application process does not mention this either. In view of all this, I can understand why up to the point she was presented with the Demands and Needs notice Miss C would have thought she had earned two years’ NCD as a named driver on the previous multi car policy she had. Although, it does concern me slightly that it seems she was never actually provided with anything from the insurer concerned suggesting or confirming this was the case. However, what I can’t accept is that a reasonable consumer seeing the Demands and Needs notice wouldn’t have at least realised they needed to check with Advantage on whether an NCD earned as a named driver was acceptable. And, of course, if Miss C had done this, Advantage would have told her it was not acceptable. So, I think, even allowing for all absence of any reference to this in the explanatory material it should have been in, Advantage has done enough to demonstrate that Miss C failed to take

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reasonable care not to make a misrepresentation about her NCD when she took out the policy with it in January 2025. I have noted what Miss C has said about Advantage only showing the Demands and Needs notice appeared in the online application journey in 2026. But it is clear from what Advantage has said that its assertion is that it has gone back through how the purchase journey Miss C went through appeared when she made her application in 2025. And I have no reason to doubt this. So I have accepted Advantage’s assertion that it did. If Advantage didn’t do this and it only went through the online journey recently, it will need to confirm that the journey hasn’t changed since January 2025. Or provide proof that the Demands and Needs notice did appear in the online journey just before Miss C went ahead with the policy. (I have highlighted this section in bold to draw it very clearly to Advantage’s attention and it would be helpful if it could confirm it has read it and understands what I require). I am also not persuaded that the fact the words ‘earned as a policyholder’ appeared in brackets is a significant consideration. This is because Miss C had not suggested prior to our investigator’s second view that she had seen this and it had misled her in anyway. And, in any event, I think most people seeing it would realise it was just a way of stating that an NCD needed to be earned as a policyholder. Or it would at least have prompted them to check. Because I consider Advantage has demonstrated Miss C failed to take reasonable care not to make a misrepresentation, I also need to consider whether it has shown that this misrepresentation was a qualifying one. And I think it has. I say this because it stands to reason that without an NCD Advantage would have offered the policy at a higher premium – the higher premium it tried to charge. And this makes Miss C’s misrepresentation a qualifying one. This brings me to the remedies available to Advantage in light of this. And there were only two, which didn’t include simply amending the premium and charging Miss C the extra amount due. Its two options were either continuing with the policy at the existing premium and paying any future claims under it on a proportionate basis. The proportion payable of any claim would have been the same percentage as the actual premium Miss C had paid of the premium she would have paid with zero NCD. If Miss C didn’t want to continue on this basis she could then have cancelled the policy. The other option Advantage had was to cancel the policy and let Miss C know it intended to do this. Either way, any premium charged for the time the policy was in force would have needed to be based on the original premium with the two years’ NCD, not the revised premium with zero NCD. And without any cancellation charges, as CIDRA does not allow for these. And as a matter of good industry practice and to treat Miss C fairly, I would also have expected Advantage to offer Miss C the option to cancel the policy, as it would have been much better for her to not have to declare on future applications that she had had a policy cancelled. Obviously, it would have been fine for Advantage to also offer Miss C the option of having the premium under the policy amended to reflect the fact she had zero NCD and for her to then pay the extra due because of this to continue to be fully covered. But this was not something Advantage was entitled to force on Miss C, which is what it actually did. Bearing in mind Advantage acted inappropriately when it established, albeit unwittingly, Miss C had made a qualifying misrepresentation, I now need to consider what it needs to do to put things right as the fair and reasonable outcome to Miss C’s complaint. The first thing I consider Advantage needs to do is to recalculate the premium due for the period Miss C had her policy with it based on the original premium it charged with two years’ NCD without any additional cancellation charges. It must then refund anything above this

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Miss C has paid with interest at 8% per annum simple from the date she paid it to the date it is refunded to her. Or if she has not paid enough to cover this Advantage needs to amend what Miss C has left to pay to reflect the amount due based on the original premium. Advantage also needs to remove any cancellation fees it has charged when doing this. I consider Advantage also needs to amend any record of the cancellation of Miss C’s policy to her having cancelled it and provide her with an email confirming it has done this. This email can include reference to the fact compensation has been provided for any extra premium Miss C paid because of this (see later in this decision). This is because I have assumed Advantage would not have opted to carry on with the policy and settle any claims on a proportionate basis. And, had Miss C been told by Advantage it was instead going to cancel her policy and given her the option to do so, as it should have done, I think Miss C would have opted to cancel it. The last thing I need to consider in putting things right is the impact of having to declare she had had a policy cancelled on Miss C when she took out a new policy after her one with Advantage was cancelled. So, if Miss C can provide evidence that she did declare this when taking out a new policy, I expect Advantage to compensate her for this. The difficulty is working out what impact it had. But I think the fairest way to do this is to take the revised premium Advantage said it would have charged Miss C with zero NCD and compare this to the premium she paid for her new policy and refund the difference. If Miss C paid for her new policy up front, then Advantage will need to add interest at 8% to this amount from the date Miss C paid for her new policy to the date of payment. If Miss C has been paying for her new policy by instalments then Advantage will need to work out any interest due to reflect this. This is all dependent on Miss C providing evidence of her new policy and that she declared having had a policy cancelled when she took it out. Finally, I should say for the sake of completeness that I have noted Miss C’s complaint point about the revised premium quoted to her with zero NCD being higher than quotes she obtained around the time Advantage told her about it. And I can see why this concerned her. However, it is difficult to know why this happened without evidence of the quotes she obtained. And I do know that new policy quotes can vary day to day due to the way pricing algorithms work. So, all I can say, is that the revised premium Advantage quoted to Miss C should have been the premium it would have charged with zero NCD in January 2025 when she took out her policy and not what it would have charged when it discovered she didn’t have two years’ NCD in October 2025. So, if this wasn’t the case, Advantage will need to work out what the premium would have been with zero NCD in January 2025 and it will then need to use this figure to calculate any extra that could be due to Miss C as a result of having to declare she’d had a policy cancelled. I have also considered the distress and inconvenience Miss C has experienced as a result of Advantage’s inappropriate approach when it discovered her misrepresentation. And I do think this has caused her some distress and inconvenience. Albeit, not as much as she would have experienced if Advantage couldn’t show she made a qualifying misrepresentation. I also need to take into account that Advantage left it unnecessarily late in the day to check Miss C’s NCD, which also meant she wasted ten months towards earning an NCD, when she could have only wasted one or two if Advantage had acted more promptly. This clearly also caused Miss C distress and inconvenience. So, I think a compensation payment of £200 overall is appropriate. My provisional decision For the reasons set out above, I have decided to uphold Miss C’s complaint about Advantage Insurance Company Limited and require it to do the following: • Recalculate the premium due for the period Miss C had her policy with it based on the

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original premium it charged with two years’ NCD without any additional cancellation charges. It must then refund anything above this Miss C has paid with interest at 8% per annum simple, from the date she paid it to the date it is refunded to her. Or if she has not paid enough to cover this, Advantage needs to amend what Miss C has left to pay to reflect the amount due based on the original premium. Advantage also needs to remove any cancellation fees it has charged when doing this. • Amend any record of the cancellation of Miss C’s policy to her having cancelled it and provide her with an email confirming it has done this. This email can include reference to the fact compensation has been provided for any extra premium Miss C paid because of this. • Check the revised premium it quoted Miss C on the basis she had zero NCD is what it would have charged her when she took out her policy with zero NCD in January 2025 and provide her with evidence to show this. • Take the revised premium it would have charged Miss C with zero NCD and compare this to the premium she paid for her new policy and refund the difference. If Miss C paid for her new policy up front, then Advantage will need to add interest at 8% to this amount from the date Miss C paid for her new policy to the date of payment. If Miss C has been paying for her new policy by instalments, then Advantage will need to work out any interest due to reflect this. This is subject to Miss C providing evidence of her new policy and that she declared having had a policy cancelled when she took it out. • Pay Miss C £200 in compensation for distress and inconvenience. I’ve gave both parties until 23 April 2026 to provide further comments and evidence in response to my provisional decision. Neither party has provided any further comments and evidence. 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. As neither party has provided any further comments or evidence in response to my provisional decision, I see no reason to depart from what I provisionally decided was the fair and reasonable outcome to Miss C’s complaint. Putting things right For the reasons set out in my provisional decision, I have decided to uphold Miss C’s complaint about Advantage Insurance Company Limited and require it to do the following: • Recalculate the premium due for the period Miss C had her policy with it based on the original premium it charged with two years’ NCD without any additional cancellation charges. Then refund anything above this Miss C has paid with interest at 8% per annum simple, from the date she paid it to the date it is refunded to her.* Or if she has not paid enough to cover this, Advantage needs to amend what Miss C has left to pay to reflect the amount due based on the original premium. Advantage also needs to remove any cancellation fees it has charged when doing this. • Amend any record of the cancellation of Miss C’s policy to her having cancelled it and provide her with an email confirming it has done this. This email can include reference to

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the fact compensation has been provided for any extra premium Miss C paid because of having to declare she had had a policy cancelled. • Check the revised premium it quoted Miss C on the basis she had zero NCD is what it would have charged her when she took out her policy with zero NCD in January 2025 and provide her with evidence to show this. • Take the revised premium it would have charged Miss C with zero NCD and compare this to the premium she paid for her new policy and refund the difference. If Miss C paid for her new policy up front, then Advantage will need to add interest at 8% to this amount from the date Miss C paid for her new policy to the date of payment.* If Miss C has been paying for her new policy by instalments, then Advantage will need to work out any interest due to reflect this. This is subject to Miss C providing evidence of her new policy and that she declared having had a policy cancelled when she took it out. • Pay Miss C £200 in compensation for distress and inconvenience.** * Advantage must tell Miss C if it has made a deduction for income tax. And, if it has, how much it’s taken off. It must also provide a tax deduction certificate for Miss C if asked to do so. This will allow Miss C to reclaim the tax from His Majesty’s Revenue & Customs (HMRC) if appropriate. ** Advantage must pay the compensation within 28 days of the date we tell it Miss C accepts my final decision. If it pays later than this, it must pay interest on the compensation from the deadline date for settlement to the date of payment at 8% a year simple. My final decision I uphold Miss C’s complaint about Advantage Insurance Company Limited and require it to do what I’ve set out above in the ‘Putting things right’ section. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss C to accept or reject my decision before 25 May 2026. Robert Short Ombudsman

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