A landlord has lost a claims dispute after he used his rental property as an undisclosed wedding and events venue. 

The complainant lodged two claims in April and July last year relating to rent default and storm damage under his building and contents policy.

Hollard declined the claims after discovering the property had been advertised and used to host weddings and other events. 

The insurer says the claimant misrepresented his position after he declared the property was not used for any business purposes beyond a rental holiday home for tenants when he first purchased the policy in February 2021.

Hollard says it informed the complainant of his duty to ensure he provided accurate and correct information regarding the property’s business status when the policy was renewed last year.

It says that it would not have issued the policy if it had been aware that the property was used to host the events.

The claimant says he believed the business purpose question only related to the insured building and not the surrounding grounds, which he acknowledged “may have been used to host events”.

He says the building was used as a “short-term rental” for guests, who were the only people allowed to access the building, besides photographers to take wedding photos.

He argues that the policy question had been poorly worded, and he did not need to correct the disclosed information because the building had not been used for business purposes beyond what he had already acknowledged.

The Australian Financial Complaints Authority (AFCA) says it was reasonable to interpret the policy’s references to “property” as “more than just the accommodation building”.

AFCA says that even if the business purposes question had been worded differently, the claimant would have likely breached the policy terms, noting that the Product Disclosure Statement’s definition of “building” included landscaping, paved driveways and pathways, fences and gates, which had been used as part of the events service.

“The complainant was clearly offering the property commercially for event hire, particularly weddings, and actively promoted that business activity,” AFCA said.

“On balance, it appears more likely than not that the accommodation building was involved in and used as part of the wedding venue business.

“Even if that is not the case, some aspects of the surrounding grounds more likely than not form part of the ‘building’, taking into account the definition of that term in the PDS.”

The ruling acknowledged a statutory declaration from one of the insurer’s underwriting managers, which declared that it would not have offered cover if it had been aware that the property had been “wholly or partly used for the business purpose of organising and hosting wedding events”. 

“I am satisfied those documents confirm that had the property’s commercial use been disclosed, the insurer would have deemed the proposal an unacceptable risk and renewal terms would have not been offered,” AFCA said.

Click here for the ruling.