A couple who failed to remember all of their previous claims while purchasing an Auto & General motor policy have lost their claim dispute.

The Australian Financial Complaints Authority (AFCA) ruled that the oversight was a breach of disclosure obligations and the insurer was entitled to decline the latest claim for damage to the couple’s vehicle.

The pair were asked during a policy inception telephone call how many claims they had made in the last five years. They were unsure if the answer was one or two, so the insurer’s representative suggested they disclose two claims.

In fact they should have disclosed four claims, and had they done so the insurer’s underwriting criteria would have ruled them out.

“The complainants say they forgot about one of the non-recoverable claims,” AFCA’s ombudsman said.

“While this may have been the case, it does not change the outcome.

“It is reasonable to expect a person to know their claims history. I do not accept forgetting means the claims history was not known to the complainants for the purpose of section 21A(5)(i) of the [Insurance Contracts] Act."

An innocent non-disclosure is still a non-disclosure, and a breach of the complainant’s duty, AFCA said.

“I am satisfied that, by failing to disclose two of the four claims the complainants had in the five years prior to policy inception, the complainants failed to comply with their duty of disclosure.

“I am satisfied if the complainants disclosed their full claims history, the insurer would not have agreed to offer the policy and would not have insured the complainants.

“Therefore, under section 28 of the Act, the insurer is entitled to reduce its liability to nil and refuse to pay the claim.”

Click here to read the full ruling.