Auto & General has won a dispute centring on the denial of an accident claim due to the driver’s undeclared criminal record, despite the insurer having details from a previously refused application for cover.

The Australian Financial Complaints Authority (AFCA) ruled the insurer couldn’t rely on non-disclosure to reject the claim, because it actually did know the information, but was entitled to rely on mis-representation as the driver’s partner, the policyholder, had falsely filled in an application.

The insurer found after the accident that the driver had previously made claims. It obtained a criminal history and driving records, and discovered he had a December 2017 suspension for speeding and a further offence for driving while suspended.

The policyholder stated in writing that she was unaware of her partner’s criminal record, but the insurer found that a year earlier she had tried to buy insurance for another vehicle, through a different brand of the same insurer.

In a December 14 2018 phone call, she had disclosed her partner’s criminal history and as a result, the insurer on that occasion said it couldn’t provide a policy.

AFCA says the duty of disclosure does not require disclosure of a matter that the insurer knows, or in the ordinary course of business, ought to know.

The information provided in the 2018 phone call should have been, but by oversight was not, annotated by the insurer in the woman’s policyholder records.

“In the circumstances, it appears that the insurer at the time of entry into the policy, did know of the criminal record, but failed to check its own file material until such time as the present claim was made,” it says.

Nevertheless, AFCA found there was a misrepresentation in the response to an online application question asking if any of the drivers listed had ever been convicted of a criminal offence.

“I am satisfied the complainant deliberately chose to answer ‘no’ to the question as to criminal offences in circumstances where she was concerned as to the effect this would have on the prospect of obtaining cover,” the AFCA ruling says.

“It seems likely the complainant was unaware that the insurer was the same, or in any case assumed the insurer did not have the earlier record available to it.”

Auto & General had established it wouldn’t have offered insurance if the complainant had not misrepresented the criminal record of her partner, and it is entitled to refuse payment of the claim, the adjudication says.

The decision is available here.