A complainant who sought cover for car damage caused by a kangaroo will not be compensated after she was found to have been excluded from her own motor vehicle policy.

The insured held an agreed value motor vehicle policy with RAC Insurance, in which she and a second person, referred to as LG, were nominated as drivers. The complainant lodged a claim in August last year after a kangaroo had damaged her car while she had been driving. 

However, RAC declined the claim, saying that the claimant had been listed as an excluded driver under the policy and that it would not cover events while the vehicle had been in the “care, custody or control of the complainant”.

The insurer says it changed the driver’s status when the policy was renewed in October 2021 after she was deemed an “unacceptable risk” by its automated “underwriting acceptance engine” due to her previous driving history.

Records of the insured’s driving history showed that she had been involved in two at-fault collisions in 2021 and had been caught speeding 40kph over the limit in 2019. 

RAC says it sent a letter along with the renewal notice informing the complainant that she was no longer covered by the policy on October 4 2021, nearly four weeks before the renewal had been due. 

The complainant says she had not received a copy of the letter and argued the insurer should have communicated with her over the phone about the changes. 

The claimant says that if she had been aware that she had been excluded, she would have cancelled the policy and found another insurer that would have covered her. 

But the Australian Financial Complaints Authority (AFCA) says RAC had no requirements, under its underwriting guidelines, to inform the driver of the changes by phone because LG had remained covered by the policy. 

“There is no requirement for an insurer to personally contact a policyholder by telephone to find out if the proposed terms are acceptable to them,” AFCA said. 

“The insurer’s records show the direct debit was being paid from the complainant’s mother's bank account and the complainant confirmed this.

“The car was still comprehensively insured under the terms and conditions of the policy and LG continued to be covered as a listed driver.

“The insurer would not have known what arrangements the complainant had with her family members about the use of the car.”

AFCA says RAC was entitled to “assess risks and decide” if it wanted to underwrite a driver and apply specific terms to the coverage.

“I am satisfied the information provided by the insurer shows it was entitled to exclude the complainant as a listed driver on the policy.”

The ruling also disputes that the driver had not received the renewal letter in October 2021, noting that she had the same residential address recorded with the insurer as she had when she lodged the complaint to AFCA.

AFCA found that the insurer had complied with the obligations under section 58 of the Insurance Contracts Act 1984 (Cth) by sending the letter to the policyholder at least 14 days before the policy had expired.

Click here for the ruling.