A vehicle owner has won his bid to overturn a claim denial after a dispute ruling found the insurer hadn’t shown he had not knowingly made a misrepresentation about a fitted refrigeration unit.

The complainant lodged the claim after his vehicle was damaged in a not-at-fault accident in March last year.   

During its inspection, Allianz discovered that the car had been fitted with the unit, which the insured had not disclosed.   

The insurer asserts that, in line with its underwriting guidelines, it would not have insured the vehicle if it had been aware of the modification. It says the complainant failed to take reasonable care not to misrepresent the vehicle’s condition and prejudiced it into insuring it.  

Provided material shows that during the online policy inception, the complainant – through his broker – had answered “no” to a question asking if the policy included an “unacceptable vehicle”. The Australian Financial Complaints Authority highlights that no information was provided on the site to define what accounted for an “unacceptable vehicle”.    

The insured also left a section titled “modifications” blank. But the authority says the layout made it unclear whether this section was an “invitation to provide further information or not”.   

The complainant says the refrigeration unit was already installed when he purchased the vehicle through a second-hand source and he did not make any other alterations.  

The authority acknowledged that the insurer had shown that its underwriting guidelines classified “refrigerated vehicles” as an unacceptable risk.    

However, it accepted that Allianz had not clearly defined to the claimant that his vehicle would have been classified as an “unacceptable vehicle” and there was no evidence to show whether it had asked about modifications.   

It agreed that based on the provided information, the insurer did not show that the claimant had deliberately breached his duty not to make a misrepresentation.  

“I am not satisfied the insurer can show the complainant (through the broker) breached his duty,” the authority said. “There was no clear way for them to understand if the vehicle was an unacceptable risk.”   
“Whilst I acknowledge the insurer provided underwriting guidelines and a statutory declaration to show ‘Refrigerated vehicles’ were an unacceptable policy risk, this does not mean it can deny the claim.”  

“Also, whilst I cannot be satisfied if it was specifically asked, there is no persuasive evidence the complainant knew, or should have known, the vehicle was modified.”   

The ruling required Allianz to reinstate its cover and settle the claim in accordance with the policy terms.   

The insurer was also ordered to pay $1500 in compensation for non-financial losses relating to stress, delay and inconvenience caused by its claim denial.    

Click here for the ruling.