A motorist who did not disclose a pre-existing dent on her vehicle will have her third-party fire and theft policy claim covered after an Australian Financial Complaints Authority hearing ruled in her favour.

Pacific International Insurance denied the woman’s claim, saying she breached her duty of disclosure by not informing the insurer of the damage when she bought her cover.

The policy, taken out on the March 27 last year, asked the complainant if her vehicle was “registered, roadworthy, in a safe condition, with no pre-existing damage”.

The complainant answered "yes" even though the vehicle had an indentation on the front left quarter panel of the car. She did not report the damage because she believed it to be cosmetic and not pertinent to the policy’s requirements.

Pacific International Insurance said the question should be read as asking each requirement individually and that the complainant wrongly interpreted the question and should have answered “no”.

AFCA refuted the insurer’s assessment of the question, saying that it should have been clearer.

“If the insurer wanted the question to be read in this way it should have formatted it in this way when it asked it,” AFCA said.

AFCA said the pre-existing damage to the vehicle was minor and not relevant to the requirements set out by the policy.

It ruled that Pacific International Insurance is required to accept her claim.

Click here to read the full ruling.