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No premium payment, no cover: uninsured dog owner loses dispute

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A man who was surprised to find his insurer had cancelled his pet insurance policy when he tried to claim for a veterinary visit has lost a dispute.

The man first learned he was no longer insured when he lodged the claim in March, seeking cover for treatment required for his dog. RACQ informed him it had cancelled the cover a year earlier due to non-payment of the policy premium.

The man says he did not receive emails sent by RACQ about the cancellation or his failure to pay monthly instalments. The man says he was in a controlling relationship at the time and suggested his former partner may have deleted the emails relating to late payments.

The dog owner offered to backpay the necessary instalments to bring the policy payments up to date but the Australian Financial Complaints Authority (AFCA) said RACQ was entitled to deny the claim.

“Whilst I note the complainant says he did not receive the emailed letters, the insurer’s only obligation is to show they were sent to the correct email address,” the AFCA ombudsman said.

“It is the complainant’s onus to ensure policy payments are made and kept up to date.”

The man suggested RACQ should have made attempts to contact him in other ways but AFCA said insurers are not obliged to do that.

He had opted to receive contact by email and had a monthly instalment pay arrangement. RACQ said it twice attempted to obtain the March 2019 instalment but it was not paid. As a result, it cancelled the policy.

AFCA says this is permitted under the Insurance Contracts Act 1984 which states an insurer may cancel a contract of insurance by giving notice in writing.

After the man missed an instalment on March 9 last year, RACQ emailed a letter informing him it would attempt to deduct the payment on March 20. That attempt to take payment also failed.

RACQ emailed a second letter on March 25 stating “this is our second unsuccessful attempt to receive your payment. A further attempt to automatically deduct the payment from your credit card will not be made. Under the terms of your policy, as we have not received payment, your policy will be cancelled effective on April 9, 2019”.

AFCA says the letter “clearly and unequivocally communicated the insurer’s intention to cancel the policy. Accordingly … the policy was effectively cancelled”.

See the full ruling here.