A pet insurer’s application of an age excess has been ruled “ambiguous” by the Australian Financial Complaints Authority (AFCA), which says a claimant with a 12-year-old dog must be paid the full amount of his claim.

AFCA made the ruling after examining Petplan Australasia’s policy information about the age excess, and ordered the insurer to settle the claim without applying it.

The man had made a claim for $11,358.42 under his pet insurance policy, seeking reimbursement for his dog’s cancer treatments. He believed he was entitled to the policy’s maximum benefit of $10,000 minus the standard excess.

When Petplan processed his claim, it applied the age excess of 35%, reducing the claimant’s entitlement to about $6500. The dog was 12 years old when the policy was last renewed. A copy of the supplementary product disclosure statement (SPDS) said an age excess applied if the insured pet was at least 10 years old.

But AFCA sided with the claimant, saying the SPDS contained “ambiguous” information as to how the age excess would apply.

AFCA also determined the certificate of insurance given to the claimant contained misleading information about the excess, saying the format of the explanation suggests the standard excess had been increased by 35%.

“The certificate of insurance says the excess is ‘$150 + 35%’,” AFCA says in its determination. “The insurer intended ‘35%’ to be a reference to the age excess, which is 35% of the amount claimed.

“However, there is nothing on the certificate of insurance to indicate this. [It] does not mention the age excess, and it does not say what ‘35%’ is a percentage of.

“The insurer’s intended message was that any claim would attract an excess of 35% of the amount claimed (potentially thousands of dollars), in addition to the standard excess of $150.

“There is no way a reasonable person could conclude this from reading the certificate of insurance, unless they also read the SPDS.”

While the certificate of insurance did advise the policyholder to read the accompanying documents, AFCA decided “this is not sufficient to remediate the misleading nature of the certificate of insurance”.

“The certificate of insurance does not say the policyholder should read the SPDS for details of the excess,” AFCA ruled. “[It] is not so obviously ambiguous that a reasonable person would know they had to read the policy documents in full to determine the excess.”

Petplan was instructed to settle the claim by paying $10,000, less the standard excess and any amounts already reimbursed to the complainant.

Click here for the AFCA decision.