A motor policyholder has won a dispute with her insurer over claims she made a misrepresentation by not disclosing her son, who had a criminal history, as a listed driver.

The woman lodged a claim for damage to her car after it was hit while parked. 

But Suncorp would not pay out, saying the policyholder failed to identify the vehicle’s regular drivers and give a fair representation of their driving history when she renewed her policy in December 2021. 

The insurer said the vehicle belonged to the son, who had a “sole financial interest in it”, and it would not have renewed the policy if he was named as a driver, given his criminal and driving history made him an unacceptable risk. It noted its policy was “ordinarily targeted at and meant for owners of passenger vehicles or persons who have financial interest in them”. 

The claimant said her son had purchased the vehicle and asked her to buy insurance.

She said she placed the car under her policy but did not list any regular drivers because it was shared by her, her partner and her son. 

She said she had been unaware of her son’s criminal history, but argued the insurer should not be allowed to decline the claim because its reason was based on a person who was not party to the policy or using the vehicle at the time of the loss.

In a dispute ruling, the Australian Financial Complaints Authority says the underwriting information provided shows all listed drivers were required to meet acceptance criteria and the policy would be declined if this was not done.

However, it is not satisfied the woman breached the requirement, because Suncorp had not clearly informed her who could take out its policy, what amounted to “repeated use of the vehicle”, and of her duty not to make a misrepresentation.

AFCA notes the insurer mentioned a “target market determination” only as a “passing footnote” on the renewal document and says the Insurance Contracts Act 1984 does not strictly require a person with an insurable interest over an asset to insure it.  

Suncorp argued its underwriting guidelines defined repeat use as “anyone you know or expect will use the car regularly”.

But the authority notes this information was not detailed to the woman and seems to conflate occasional driving with repeat use.

It says even if the woman was aware of the requirement to list her son on the policy, the insurer could not prove she knew of his criminal history.

AFCA’s decision requires Suncorp to accept the claim, saying the complainant made no “relevant failure” regarding the misrepresentation.

“It would not be fair to conclude she did when the insurer has not set out its expectations clearly or informed the complainant of the duty and the importance of complying with it.” 

Click here for the ruling.