How does an insurer decide if a mistake was careless or deliberate?

Factors include how clear and specific the insurer's questions were, the type of insurance and its target market, any explanatory material the insurer provided, and whether the answer was given through a broker acting for you. A dishonest misrepresentation is always treated as failing to take reasonable care; an honest mistake is judged against what a reasonable consumer would have done.

What is a 'proportionate settlement' under CIDRA?

If your mistake was careless and the insurer would still have offered cover but on different terms or a higher premium, they can reduce your claim payout proportionately — for example, paying a percentage of the claim reflecting the extra premium you should have paid. If they would have declined cover altogether even with accurate information, they can avoid the policy and refuse the claim, but must return your premium.

Insurance & Claims · UK

Can my insurer refuse a claim because I made a mistake on the application?

Q: Can my insurer refuse a claim because I made a mistake on the application?

It depends on whether the mistake counts as careless or deliberate/reckless under the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA). A genuinely careless mistake should get a proportionate response, not an outright refusal — the insurer settles based on what it would have done had you given the correct answer. Only a deliberate or reckless misrepresentation lets the insurer avoid the policy and refuse the claim entirely.

Only if that mistake was deliberate or reckless — a genuine slip gets a proportionate response, not a flat refusal.

Kibbo Consumer Desk · Updated September 2026 · 8 min read

It depends entirely on how that mistake is classified — and the law draws a sharp line between an honest slip and dishonesty. Under the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA), you only have to take reasonable care not to misrepresent facts when applying for cover — the older, stricter duty to volunteer every possibly relevant fact was replaced. If a mistake happens despite reasonable care, or is genuinely careless rather than dishonest, the insurer's remedy should be proportionate, not a blanket refusal. A refusal to pay anything at all is only justified if the misrepresentation was deliberate or reckless.

Careless vs. deliberate/reckless — the distinction that decides everything

Type of misrepresentation	Insurer's remedy
Careless (honest mistake, didn't meet the reasonable care standard)	Proportionate settlement — based on what the insurer would have done had it known the truth (different terms, higher premium, or reduced payout)
Deliberate or reckless (knew it was untrue/misleading, or didn't care)	Insurer can avoid the policy entirely and refuse the claim, though it must return the premium unless that would be unfair
No misrepresentation at all (reasonable care taken)	No remedy available to the insurer — the claim stands

Crucially, for a "qualifying misrepresentation" to exist at all, the insurer has to prove it would have offered the policy on different terms, or not at all, had you given accurate information. An honest mistake about something that wouldn't have changed anything isn't grounds for any remedy.

What counts as "reasonable care"

The standard is that of a reasonable consumer, assessed against the actual circumstances — not a technical, best-possible-answer standard. Relevant factors include:

How clear and specific the insurer's questions were
The type of insurance and who it's aimed at
Any explanatory material the insurer provided alongside the questions
Whether a broker was acting for you or for the insurer when the information was given
Your own particular characteristics or circumstances, if the insurer knew or should have known about them

A dishonest answer is always treated as failing this standard automatically — but an honest, reasonable mistake, especially in response to a vague or ambiguous question, has real legal weight in your favour.

What a proportionate settlement actually looks like

If your mistake was careless and the insurer would still have offered cover but at a higher premium, they typically reduce your claim payout by the same proportion — for example, paying 80% of a claim if you should have paid 20% more in premium. This is not the same as refusing the claim outright, and it's a routine outcome the Financial Ombudsman Service regularly reviews and upholds when applied correctly.

What to do if your claim is refused over an application error

Ask the insurer explicitly whether they're treating the mistake as careless or deliberate/reckless, and on what evidence.
If they're refusing the claim entirely, ask them to justify why the mistake meets the higher bar of deliberate or reckless conduct, not just carelessness.
Review the original question you answered — was it clear and specific, or could a reasonable person have misunderstood it?
If you believe the mistake was genuinely careless at most, ask for a proportionate settlement instead of an outright refusal.
If unresolved, complain formally to the insurer, and escalate to the Financial Ombudsman Service if you remain unsatisfied.

Official sources

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