A burglary victim who sought cover has lost her claims dispute after she failed to inform her insurer of a previously declined claim.

The complainant lodged a claim with IAG a day after perpetrators entered her home and stole items on May 1 last year.

The insurer acknowledged the circumstances of the event had been coverable but declined the claim after alleging that the homeowner had made a fraudulent misrepresentation of her insurance history when she had applied for her policy in January last year. 

On a telephone recording of a discussion between an insurer representative and the claimant from before the policy was incepted, the representative asks her if an insurer had refused or cancelled cover in the last five years. The woman, who was accompanied by a friend who acted as a translator, said she had “never claimed before”. 

IAG told the Australian Financial Complaints Authority (AFCA) that the insured’s answer had been misrepresentation, highlighting a declined car claim from 2018 that the insurer, at the time, alleged was fraudulent. 

The claim, which had been ruled on by AFCA’s predecessor, the Financial Ombudsman Service, found that the complainant and her husband had not met the onus to establish a loss. 

The insured acknowledged the 2018 claim but said she believed IAG’s questions over her insurance history had only been related to previous claims on home insurance, to which she had none, and criticised the insurer for asking “trick questions”. 

But IAG maintained the claimant had fraudulently misrepresented her claims history and said she had not provided any evidence that showed she had not understood the question. 

AFCA sided with the insurer, saying that the complainant had made misrepresentations by failing to mention the 2018 car claim.

“What is clear from the exchanged material is that the complainant did have a previous claim... and did not advise the insurer’s representative of that car claim, when she incepted the current insurance policy,” AFCA said. 

“Noting that the answers given by the complainant do not accurately reflect her claim’s history, I am satisfied that the complainant at policy inception, made a misrepresentation regarding her claims history.

“However, given the circumstances, I am not satisfied that the insurer has established that the misrepresentation was fraudulent. 

“I note the need for the complainant to have a friend assist her with inception process and the fact that English is not the complainant’s first language.”

IAG said that if it had been aware of the complainant’s claim's history, it would not have offered her insurance. 

AFCA acknowledged that under IAG’s underwriting guidelines, any customer found “being fraudulent with any insurer in the last five years” would have their policy application declined, and found the insurer’s decision to deny the claim fair. 

“I am satisfied that had the complainant correctly advised the insurer of her claim’s history at policy inception, the insurer would not have been on risk at the time of the complainant’s loss,” AFCA said. 

Click here for the ruling.