A man who lodged a claim for theft of his Alfa Romeo has lost a dispute after his insurer uncovered scores of undisclosed previous claims, including one declined four years earlier based on fraud.

IAG said the man, who held a comprehensive motor policy, fraudulently misrepresented his claims history when the policy was arranged to deceive it into offering insurance cover it would not otherwise have offered.

The man told the Australian Financial Complaints Authority (AFCA) he answered all questions truthfully and the insurer should pay the claim.

AFCA ruled IAG was entitled to avoid the contract of insurance and decline the claim, saying he was aware of his extensive claims record.

“I consider the complainant’s failure to inform the insurer of his claims history amounts to fraudulent misrepresentation,” AFCA’s ombudsman said. “There is no information to show the complainant was, somehow, unaware of his claims history when the current policy was arranged.”

An enquiry showed he made 45 claims in the three years before the Alfa Romeo policy was incepted, nine with an outcome listed as declined or repudiated and others noted to have been withdrawn. A large underwriter confirmed that 38 listed claims were made by the complainant, and another 12 claims had been made which had not been listed.

The enquiry listed the make, model, registration number and date of loss for motor claims. The man did not dispute that he previously owned any of the vehicles listed.

IAG provided a transcript of a call in which the man arranged insurance for a Nissan Pulsar and made a claim which it declined. After that policy was incepted, he asked to be transferred to the insurer’s claims department to lodge a claim for a BMW Z3 which was damaged in a collision with an unknown third party.

“I consider the insurance claims enquiry listing 50 claims, the current (Alfa Romeo) claim, the claim for the Nissan Pulsar and the notification of a claim for a BMW Z3, is overwhelming evidence the claims were all made by the complainant,” the ombudsman said, noting the man’s “very extensive claims history” included a claim declined based on fraud in 2017.

“The complainant has made at least 52 claims in the five years before the policy was incepted.”

The man contacted IAG in January to arrange a new policy for his 2013 Alfa Romeo 155. A recording and transcript of that conversation showed he was asked questions relevant to the risk to be insured, including about his claims history.

He told IAG’s representative neither he or any other driver of the vehicle had, in the last five years, an insurance claim refused, or a policy cancelled, and confirmed he had made no claims in the last five years. IAG sent him a schedule of insurance which included a copy of the responses to the questions asked and the policy commenced on January 6. Ten weeks later, he lodged a claim for the theft of the vehicle.

IAG’s underwriting guidelines stated it would not accept cover where, in the last five years, a claim was declined for fraud or non-cooperation.

AFCA said asking questions relating to the risk to be insured was “essentially the business of insurance” and the law allowed an insurer to avoid a contract of insurance where it would not have been offered if not for a statement which was made fraudulently.

“This protects the insurer from having to pay claims for risks it deems unacceptable. It is fair the insurer is entitled to avoid a contract of insurance which is based on a false representation of a risk.”

See the full ruling here.