Arson victim must return £241,000 home insurance payout... because she didn't declare £150 fine

Published 17th Oct 2009

When Michelle Barber's home was set ablaze by her estranged husband, she lost everything she owned.

Thanks to a £241,000 insurance payout, she was able to rebuild her bungalow and her life.

But now her insurer is demanding she repay the money because she failed to declare a minor offence - a £150 fine in 2002 for overpayment of benefits.

Michelle Barber's estranged husband Gary Hooley was jailed for setting fire to her home. She now risks losing her second home over a £150 fine

The police were never involved but the insurance company, Aviva, claims it would never have offered her cover had it known.

Now Miss Barber faces the heartbreaking prospect of losing her home for a second time.

'I lost everything once,' she said yesterday. 'Now I could end up with nothing to leave my kids.'

Campaigners warn that millions with convictions or cautions could find themselves in the same position.

Miss Barber, a 51-year-old mother of two, was left homeless after her Barnsley home was burned out by her ex-husband, Gary Hooley, in February 2007. He was later jailed for four years.

Two weeks before Miss Barber was due to move into her new home, Aviva discovered her 2002 benefits infringement.

'I wasn't arrested, the police weren't involved and I'd simply forgotten about it by the time I took out the insurance,' she said.

'It isn't something I would have thought would have affected the policy.'

She added: 'Insurance companies are not making things clear enough.

'You could have a fine for dropping litter in the street and your home insurance becomes void. It's a nightmare.'

Miss Barber is taking her case to the Financial Ombudsman and claims she was not asked about previous fines when she took out the buildings and contents policy by telephone.

She said: 'I have asked for a transcript of that call because I am adamant I was not asked those questions.

'I was asked about any claims in the last five years but not fines or anything like that.'

Under insurance law, applicants must disclose 'all material facts'. This applies to convictions or cautions regardless of whether you are asked a specific question.

Last night a spokesman for Norwich-based Aviva said it stood by its decision to force Miss Barber to repay the money.

He said: 'As we consider that Miss Barber's non-disclosure involved a material fact that was deliberately withheld, we have voided the policy from its inception.'

But Chris Bath from the charity Unlock, which is campaigning on the issue, said: 'People are getting caught out because they do not realise that they have to disclose these things.

'It is not just the policy holder who needs to own up to their past. You also have to declare the past of those living with you, including your children, partner and even lodgers.'

Source: ' Daily Mail '

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