Red Sands Insurance Company (Europe) Limited · DRN-6236655

The complaint Ms L complains that Red Sands Insurance Company (Europe) Limited (‘Red Sands’) declined a claim she made on her pet insurance policy for the removal of a “benign wart” from her dog’s leg, and then placed an exclusion on the policy, backdated to the start, for “Mass: Growths, Tumours and Cancers and resulting conditions”. What happened Ms L bought a Lifetime pet insurance policy, underwritten by Red Sands, to provide cover for her dog, W. This began on 4 March 2025. When she purchased the policy Ms L was asked ‘Does your pet have any pre-existing conditions?’ Red Sands says she answered ‘No’. W was 9 years old at this time and had had a number of skin growths examined and investigated over the years. In February 2023 she had a “small 1x1cm mass” between her forelimbs tested and confirmed to be a lipoma (a non-cancerous tumour made of fat cells). In March 2023 a “small 2 mm diam[eter] skin mass” on her left forelimb in the “lateral elbow region” was tested and the result given as “no evidence of tumour, keep monitored”. And in September 2024 she had a “very small lump on upper left eyelid” which the vet assessed as “most likely benign”. In June 2025 Ms L took W to the vet because the “Wart left elbow” had started to bother her and she’d made it bleed. The vet recommended a biopsy and gave Ms L a quote for this procedure. This came to almost £1,300. Ms L submitted a pre-authorisation request for wart removal to Red Sands. It declined to cover this on the basis that the condition (a mass) pre-existed the start of the policy. It then told Ms L that it had added an exclusion for “masses, growths, tumours, cancers, and resulting conditions”, backdated to the start of the policy. Ms L complained. She said: “I can understand that [W] will not be covered to have the wart removed, however, to state that she is now not covered for tumours and cancer is absolutely ridiculous. [W] has never had any cancerous lumps on her. The tiny lumps she has on her body are all benign …” Red Sands maintained its position, so Ms L referred the complaint to this service. She told us she understood Red Sand’s decision not to cover the cost of the wart removal, but she disagreed with the exclusion placed because W had never been diagnosed with any kind of cancer. She added that she’d now paid for the wart to be removed and tested and it was “completely benign”. Our Investigator’s view Our Investigator thought Ms L’s complaint should be upheld. She said that prior to March 2025 when Ms L purchased the policy, W hadn’t been diagnosed with any conditions and Ms L wouldn’t reasonably have known there was a problem that could likely lead to investigation or treatment later on down the line. So, she said it wasn’t fair for Red Sands to decline the claim for wart removal, and it should reimburse the fees for this plus 8% simple interest per year from the time Ms L paid those fees, until she is reimbursed.

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The Investigator went on to say that, as she didn’t think Ms L had failed to take reasonable care when answering Red Sands’ questions at inception, there had been no qualifying misrepresentation which would allow Red Sands to retrospectively place the exclusion, and therefore the exclusion should be removed. Red Sands disagreed with the Investigator. It said, “[W] had a pattern of masses being identified, monitored, and even aspirated well before the policy started … which is highly relevant to risk assessment.” In its view the repeated monitoring of “lumps” should have been disclosed by Ms L and, had it been so, the underwriting decision would have been different. It added that the wart removal claim was “directly connected” to W’s pre-policy signs and symptoms. As no agreement could be reached, the complaint was passed to me to review afresh and decide. My provisional findings I issued a provisional decision on 6 March 2026 in which I explained that I had reached a different outcome to the Investigator, and I intended to uphold the complaint in part. I said: “The claim for wart removal When making a claim under an insurance policy, the onus is on the policyholder to prove they have a valid claim. If they do, the insurer should cover the claim unless it can prove that a policy condition or exclusion applies. Ms L has shown that W required a procedure for wart removal. So, on the face of it, she’s demonstrated that she has a valid claim. Red Sands seeks to rely on an exclusion for ‘Pre-existing conditions’. The policy says the following: “Pre-existing conditions aren't covered in this policy. A condition, injury or illness is pre-existing if [W] has shown signs or symptoms before you joined [Red Sands] … This also includes any other condition, injury or illness which is connected to that pre-existing condition as determined by a vet.” Given the vet notes relating to W’s left forelimb, where a mass was first documented in March 2023, I find that the wart Ms L sought pre-authorisation to have removed from W’s left elbow area and biopsied in June 2025 more likely than not pre-existed the start of the policy and was something Ms L was aware of at the point of purchase. She had, after all, been advised that this needed to be monitored and I have no doubt that she did monitor this left elbow area over the intervening two years because she took W back to the vet as soon as this mass started to trouble her. In these circumstances, I provisionally conclude that it was fair and reasonable for Red Sands to decline to pre-authorise or pay a claim for the removal of this wart. I believe Ms L broadly accepts this outcome, and its Red Sands’ decision to place an exclusion which has generated her main dissatisfaction. It’s that issue I’ll turn to now. The exclusion The remedy to turn back the clock and apply an exclusion retrospectively is set out in the Consumer Insurance (Disclosure and Representations) Act 2012 (‘CIDRA’). This legislation sets a duty on a consumer to take reasonable care not to make a misrepresentation when a contract is entered into or varied. For a remedy to be available to Red Sands under CIDRA, it would need to establish that Ms L failed to answer a clear question about W’s health with reasonable care. It would also need to show that if Ms L had taken reasonable care, it would only have

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offered her a policy on different terms or not at all. This would make the misrepresentation a qualifying one. Red Sands has shown that at the point of sale it asked Ms L whether W had any pre- existing conditions. The definition available to Ms L on screen at the point of answering the question read: “Pre-existing refers to any accident, illness or condition which is present or has clinical signs and symptoms before your policy begins …” Ms L answered ‘No’. I think the question asked by Red Sands was clear but, as I’ve already said above, I don’t think Ms L answered it correctly. I say this because when she bought the policy in March 2025 she was aware that she’d taken W to the vet to have a number of skin growths examined and investigated over the years, and although none had turned out to be cancerous, they were generally subject to monitoring. Indeed, the lipoma was noted and checked in June 2024 and again in February 2025, just a few weeks before she bought the policy, along with the lump on W’s eyelid. Turning to the question of what would have happened had Ms L answered with reasonable care, and provided some information about W’s history of growths, Red Sands has said that it would have placed an exclusion for “Growths, Tumours, Cancers and related conditions”. It therefore says that Ms L made a qualifying misrepresentation which, under CIDRA, entitles it to place and retrospectively apply this exclusion now. However, I provisionally don’t agree that what Red Sands has shown me about its underwriting criteria supports this. My reading of what Red Sands has submitted is that if Ms L had disclosed at the point of purchase that W had a history of non-cancer associated growths or masses it would have placed a less restrictive exclusion – an exclusion for “Growths, Tumours and related conditions”, one that doesn’t specifically mention cancer. Whilst I acknowledge there is still likely to be some overlap between this exclusion and certain cancers, it leaves open the potential, depending on the nature and origin of the cancer, for cover to be given. And that feels fair in these circumstances. So, overall, whilst I agree with Red Sands that it was fair to decline Ms L’s claim for wart removal treatment costs under the ‘Pre-existing conditions’ wording of the policy, I don’t think Red Sands is entitled to add the exclusion which includes the word “Cancer”. As Ms L has said, prior to the start of the policy, W’s growths had all been assessed as benign and that’s clearly a relevant factor in the risk assessment.” In terms of a provisional remedy, I said: “To put things right, I intend to require Red Sands Insurance Company (Europe) Limited to remove the exclusion for “Growths, Tumours and Cancers and resulting conditions” and replace it with the exclusion for “Growths, Tumours and related conditions”. I also intend to direct that Red Sands pays Ms L £150 for the distress caused to her by the placing of the more restrictive exclusion. This is to acknowledge that Ms L has been caused worry that she’s paying for a policy which will not cover W if she develops any form of cancer requiring treatment in the future.” Ms L fully accepted my provisional decision. Red Sands agreed that there were no indications of cancerous masses prior to the start of the policy. But it explained that its internal system will not allow it to apply the exclusion wording “Growths, Tumours and related conditions” exactly as referenced in my provisional decision. So, it offered to remove the existing exclusion and replace it with more specific exclusions for “Wart” and “Lipoma” instead. It accepted that this would more accurately

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reflect the conditions present within W’s medical history and ensure that the exclusion is proportionate to the risk disclosed. I explained to Ms L what Red Sands had offered to do and she was satisfied with this. I am now able to make my final decision. 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 both parties have agreed with my provisional findings, I see no reason to alter them. So, my provisional findings, reproduced above, should be read as my final decision. However, given what Red Sands has told me about the practicalities of removing the exclusion for “Growths, Tumours and Cancers and resulting conditions” and replacing it with the exclusion for “Growths, Tumours and related conditions”, I have amended my direction for how things should be put right. Putting things right To put things right, Red Sands Insurance Company (Europe) Limited must: • Remove the exclusion for “Growths, Tumours and Cancers and resulting conditions” and replace it with specific exclusions for “Wart” and “Lipoma”. • Pay Ms L £150 for the distress and worry caused to her by the placing of the more restrictive exclusion. My final decision For the reasons set out above, and in my provisional decision, my final decision is that I uphold this complaint. I direct Red Sands Insurance Company (Europe) Limited to take the action and pay the award set out in the ‘Putting things right’ section, above. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms L to accept or reject my decision before 16 April 2026. Beth Wilcox Ombudsman

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