The Australian Financial Complaints Authority (AFCA) has ruled in favour of a complainant, whose claim for vehicle damage was declined by his insurer because he failed to disclose his prior claims history.

AFCA agreed Hollard had clearly informed the complainant of his duty of disclosure when the comprehensive motor insurance policy was purchased through the insurer’s website in October 2018.

It says there is “no real dispute” that the complainant had breached his duty of disclosure when he answered “none” in reply to a pre-policy acceptance question from Hollard asking how many claims he had made in the last three years.

But AFCA does not accept the insurer’s submission that it would not have issued the policy had the complainant disclosed that he had five claims in the relevant period.

According to AFCA, two of the five claims made by the complainant should not be counted within Hollard’s underwriting guidelines. The claims had been declined or repudiated possibly because they were not valid within the terms of the policy that was in place at that time.

“Based on this review of the insurance report, it is possible that the complainant had as few as three claims that would require disclosure,” AFCA ruled, as it upheld a recommendation that was in favour of the complainant.

“The insurer says based on its underwriting guidelines that the complainant would have been an unacceptable risk and it would have refused cover.

“The insurer has not established that it has been prejudiced by the complainant’s failure to disclose his relevant claims history.”

Hollard had disputed the AFCA recommendation that was made last year. In the recommendation, AFCA decided the insurance claims history report that Hollard relied on to decline the claim was “lacking in detail”.

According to a copy of the recommendation attached to the ruling, Hollard has not established it would have declined to offer cover had the correct disclosures been made.

The recommendation says Hollard is required to cover the accidental loss of the vehicle under the terms and conditions of the policy.

Click here for the AFCA ruling.