Undisclosed debt agreement results in rejected insurance claim
Undisclosed debt agreement results in rejected insurance claim
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
A motorist lost her insurance claim dispute after failing to disclose a debt agreement while renewing her insurance policy.
The insured claimed for damage to her car following an accident in March last year. After buying her policy in i2018, she renewed it in i 2020. The client had entered a debt agreement on January 31, 2019 but failed to disclose it to her insurer at renewal.
The insurance company rejected her claim, saying it learned only recently she had a debt agreement and would not have re-issued the policy if it had known.
The insured alleged that she was not asked whether or not she had entered a debt agreement when renewing her policy but the Australian Financial Complaints Authority (AFCA) determined that the insurer had reasonable grounds to deny the claim due to the non-disclosure of information by the complainant.
The AFCA found evidence from which it appeared that the insurer informed the complainant of her duty of disclosure on policy renewal in a clear manner.
According to AFCA , “Section 21 of the [Insurance Contracts Act] provides for the insured’s duty to disclose every matter known to the insured that the insured knows to be a matter relevant to the insurer’s decision to accept the risk”.
The complainant said the insurer did not ask her specific questions about her financial position and was unaware of her need to inform the insurer that she had a debt agreement.
“I acknowledge that the complainant says that the insurer should have specifically asked her about her financial position during phone calls, however, the insurer is not required to do this.” AFCA said
The certificate of insurance required that the insured confirm that she was not currently bankrupt or subject to a debt agreement. The AFCA states that the complainant “provided no information to indicate a change in the matter”.
The insurer said that it was prejudiced by the fact that she withheld information about her debt agreement, and would not have renewed her policy had she informed them of this.
The insurer had to refund the complainant's premium for the policy period that commenced from her renewal if it had not done so.
Published:Wednesday, 25th May 2022 Author:
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
Fresh industry updates on severe weather claims are a reminder that storm, flood and cyclone losses are no longer rare planning scenarios for Australian small and medium businesses. Claims linked to major weather systems affecting Queensland and New South Wales continue to move through insurer assessment, repair and settlement processes, with businesses facing familiar pressure points: damaged premises, interrupted trading, ruined stock, delayed repairs and uncertainty about what is actually covered. - read more
Australia's mandatory ransomware payment reporting regime is now a practical compliance issue for many business owners, not just a technology concern. Under the national cyber security reforms, entities above the relevant annual turnover threshold must report certain ransomware and cyber extortion payments within a short statutory timeframe. For SMEs operating close to, or above, that threshold, the change adds another layer to an already complex risk environment. - read more
Latest general insurance performance data from APRA points to an industry that remains financially resilient, with insurers benefiting from disciplined underwriting, investment income and a continued focus on pricing risk accurately. For Australian small and medium-sized businesses, that is useful context heading into renewal season, but it should not be read as a simple promise of cheaper premiums. - read more
Recent industry reporting on the latest insurance complaints environment points to a clear message for Australian small businesses: the hardest part of insurance is often not buying a policy, but relying on it when something goes wrong. Disputes continue to arise around claim delays, declined claims, settlement amounts, policy exclusions and communication breakdowns between customers and insurers. - read more
Australian businesses are increasingly using AI tools to research products, shortlist providers and understand policy options. That convenience now comes with a clear warning for small business owners: not every insurance answer surfaced by AI search is coming from a licensed, accountable or locally relevant source. - read more
If you are in the market for a new or used car, then we're in the market to help you arrange the money. Our car loan & leasing finance service is backed by a national panel of car loan specialists who will establish your eligibility, find lender/s offering the best deals for your situation - and help you through the approval and settlement process. No charge to you - and no obligation to proceed with any recommendations offered.
Insurance is a vital component for any small business. It acts as a safety net, helping to protect your enterprise from unexpected financial losses. Whether you run a retail shop, a consultancy, or a manufacturing unit, having the right insurance coverages can make the difference between thriving and merely surviving. - read more
In today's rapidly evolving business environment, insurance has become an essential component for the survival and success of small to medium enterprises (SMEs). As businesses navigate through uncertainties, unexpected events can pose significant threats. Insurance not only provides a safety net but also conveys a sense of stability and trust to partners and customers. - read more
Running a business in Australia comes with its own unique set of challenges and rewards. One of the most crucial aspects of ensuring your business thrives is having comprehensive insurance in place. But what exactly does 'comprehensive insurance' mean for your business? - read more
Welcome to the elucidative journey through the realm of business insurance and the pivotal role it plays for small businesses in Australia. In the ever-evolving business landscape, having a solid safety net is not merely an option, but a necessity to thrive amidst unforeseen challenges. - read more
Different occupations face different business risks. This guide explains how Australian sole traders, contractors, consultants, retailers, trades and other small business owners can assess which types of business insurance may be relevant to their activities. - read more
Knowledgebase
Professional indemnity: An insurance that provides cover for liability incurred in the course of exercising a profession.
No comments yet. Be the first to share your thoughts.