A driver whose car was damaged in a collision with a truck has lost a dispute over a claim declined because it was found that screws, tape and possibly glue were holding parts of the vehicle together before the accident.

Allianz Australia says it refused the claim because it was not informed about the pre-existing damage to the car and would not have offered cover if it had known.

The Australian Financial Complaints Authority (AFCA) decision says the policy was taken out on October 29 last year after the vehicle was purchased for a relatively low price from a small caryard. The accident with the truck happened on December 30 and the vehicle was assessed on January 13.

“The insurer says the car had pre-existing structural damage and poorly completed past repairs, including screws and tape holding panels together and painting done by aerosol paint,” it says. “The insurer’s assessor assessed the car as unroadworthy.”

AFCA says it’s clear from a recording that the complainant was aware of the duty of disclosure for the policy and had been given the opportunity to make any changes required to the Certificate of Insurance (COI).

Responses in the COI show the answer “No” for the question asking if the vehicle “had any rust, hail, or unrepaired body or windscreen damage (excluding minor scratches and general wear and tear)”.

The policyholder says he was not aware of the pre-existing damage, it was not obvious from looking at the car, there would be no possible way for him to know about the damage as he is not an expert, the car had a roadworthy certificate and he did a test drive and it performed well.

The AFCA adjudicator, who viewed photos of the vehicle, says the man was purchasing the car for his son to use to learn to drive, and a careful inspection would be expected.

“The photos clearly show rust in one section of the car,” he says. “The photos also clearly show that external sections of the car have unrepaired body damage, in that inappropriate repair attempts have been made with tape, screws and possibly glue in various sections of the car.”

The decision finds on balance that the complainant knew he should have responded “yes” in answering the question about the state of the car, and a reasonable person in the circumstances would have disclosed the information.

The insurer had shown that it was prejudiced by the non-disclosure, as it would not have offered cover had the complainant disclosed the information, and was entitled to decline the claim and cancel the policy, AFCA says.

The decision is available here.