A driver who did not divulge the extent of his bad driving record has won a claim dispute because the insurer should have asked more questions.

The Australian Financial Complaints Authority (AFCA) ruled in favour of the policyholder who declared his most recent licence suspension but not two other suspensions.

In July 2022, the driver lodged a damage claim for his vehicle. The insurer cancelled the policy and declined the claim, saying the driver did not disclose his full driving history when he took out the policy in February that year. If it had known, it would have declined cover.

The driver asked AFCA to rule that Eric Insurance Ltd accept and settle the claim, saying he applied for the policy online via his mobile phone and provided as much detail as limited space allowed.

AFCA said the claimant had honestly declared “Yes” and entered details for his most recent licence suspension.

The driver omitted to check a box which invited policy applicants to include another licence event.

“If this box is ticked, further sections appear for the complainant to provide information about additional licence events,” AFCA said.

“Relevantly, the insurer’s system does not ask the complainant to confirm he had disclosed all licence suspensions or events. Instead, the system allows the complainant to proceed without checking the box.”

AFCA said the policyholder could not be said to have “made a misrepresentation” merely because he failed to answer a question.

“The insurer has also provided a copy of a call recording with the insurer shortly after the policy was taken out. In this call the insurer asks the complainant to confirm if his accident and driving history is all true and correct. The complainant says 'Yes'. This is not a misrepresentation," AFCA said.

“This is because the complainant answered the insurer’s question online correctly and did not provide any incorrect information.“

AFCA said the insurer had the opportunity to ask the complainant about any licence suspensions or events.

The insurer was directed to offer to reinstate the policy. If the complainant chose to have the policy reinstated, he could proceed with the claim. The insurer had to accept the claim and settle it as per the policy wording. The complainant was required to pay any policy excess.

The decision is available here.