A motor policyholder who stated her son’s car was stored in South Australia has been denied a payout after her insurer argued it would not have covered a vehicle that was, in fact, kept in Victoria.

The son lodged a claim in April last year following a crash, and SA-based RAA Insurance deemed the vehicle a total loss. But the insurer rejected the claim and cancelled the policy upon being told the car was bought and registered in Victoria, although the son made frequent visits to SA.

The man also told RAA he was the vehicle’s primary driver and his mother did not use it often.  

The son later changed his statements, telling the Australian Financial Complaints Authority the vehicle was not his and had not been registered in Victoria.  

But in its dispute ruling, AFCA says it is unconvinced by the reversal, noting the man provided no evidence of the car’s registration.  

“I am satisfied on the balance of probabilities that the vehicle was registered, stored and used predominantly in Victoria at the time the policy was incepted,” an authority ombudsman said.  

“The policyholder knew her son was using the vehicle, and he disclosed a Victorian address to the insurer during the claim process ... I am therefore satisfied the policyholder made a misrepresentation regarding the usual location and storage of the vehicle at policy inception.”  

RAA referred to underwriting guidelines and a declaration from an employee who confirmed the insurer would decline cover for any vehicle not registered in an SA or Broken Hill postcode.    

AFCA says the complainant’s misrepresentation prejudiced the insurer’s ability to assess the vehicle’s risk.

“The breach led to [the insurer] offering a policy, and it would not have done so if the complainant had complied with the duty and advised the vehicle was stored outside of SA. In the circumstances, it would be unfair to require the insurer to pay the claim for damage to the vehicle.” 

Click here for the ruling.

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