A Melbourne Mazda driver who told Allianz his car was for private use but later offered it for $30 a day through a car rental company has won a claim dispute after the vehicle was stolen from the car hire premises.

Although Allianz’s renewal notice a few months before the theft stated “this vehicle is used for private use only”, it did not include a specific request that the man state whether the car was used for business purposes.

In a section making requests for specific information about criminal history, licensing, roadworthiness and vehicle modifications, the renewal notice made no mention querying whether there was any business use.

The Australian Financial Complaints Authority (AFCA) ruled in favour of the car owner, saying insurers “cannot rely on general requests for disclosure”.

Allianz’s renewal notice “did not specifically ask the complainant to disclose whether his car was used for business purposes. Therefore, the complainant was not required to disclose that his car had been offered for rent,” AFCA said.

The man entered the rental arrangement, which netted him just $7.50 for each day his grey 2013 Mazda3 Neo was leased, to enjoy free parking near Melbourne airport.

He lodged a claim after the car, worth around $13,000, was stolen in July 2018 and found burnt out two weeks later.

The Mazda had been left with the rental company, which parked it on its premises and secured the car key in a lock box attached to a fence. The company lot was left unattended after 11pm and when the owner came to pick up his car some hours later, he found the vehicle was missing and the lock box had been cut from the fence and cut open.

Allianz denied the insurance claim on the basis of non-disclosure and misrepresentation, saying that if it knew the complainant’s car was used for business purposes it would not have renewed the policy.

AFCA disagreed, finding the man did not make “any representation” to the insurer about how his car was used.

“If there was no representation, there can be no misrepresentation,” it said.

The man first took out his comprehensive car insurance policy in May 2014, telling Allianz the car was for private use only. The policy was renewed in May 2018, two months before the theft claim was lodged and five months after the rental car company agreement was made.

A renewal notice section headed ‘previous information’ listed information about criminal history, licensing, roadworthiness, and vehicle modifications. It did not mention whether the insured vehicle was used for private or business purposes.

Another page stated “this vehicle is used for private use only” but AFCA said this was too removed from the ‘previous information’ section to seem “relevant”.

“The matters listed under Previous Information seem relevant to the risk level of the policy, and they appear immediately below the statement about the duty of disclosure. An ordinary person reading the document would realise these matters were relevant to the insurer’s decision about whether to offer insurance. An ordinary person may not think the information on page 5 was similarly relevant.”

AFCA added that there was “nothing in the renewal notice to indicate the renewal offer is contingent on these matters. There does not seem to be any reason why, if the matters are so relevant, they are not listed under Previous Information”.

Allianz’s request “did not include a request to tell the insurer whether the insured vehicle was used for business purposes” and it could not rely on a request for disclosure if the request was not made in accordance with the Insurance Contracts Act 1984.

The case hinged on a technicality relating to Section 21B of that Act, which does not allow an insurer to rely on general requests for disclosure.

Allianz asked the man to reveal any change to any matter previously disclosed, including his statement when he first took out the policy in 2014 that his car was for private use only. However, it “did not ask about this matter in accordance with section 21B(3). Therefore, the insurer waived compliance with the duty of disclosure in relation to this matter,” AFCA said.

AFCA also noted Allianz’s underwriting guidelines say it will insure vehicles used for ridesharing, and said it failed to establish that it would not have provided insurance if it had known the car was offered for rent.

See the full ruling here.