A driver’s vehicle theft claim will not be paid after his insurer showed he made a misrepresentation by failing to disclose a common assault conviction.

The complainant took out a comprehensive car policy with Auto & General in September 2022. The insurer asked if he had “ever been convicted of a criminal offence” and the man responded “no” despite being convicted of assault in June 2021.

The insurer said if it had been aware of the man’s criminal history, it would not have insured him. 

But the policyholder said he did not disclose the conviction because he did not think it was relevant to buying vehicle insurance.

In a dispute before the Australian Financial Complaints Authority, the insurer referred to a statutory declaration from its motor underwriting manager, who confirmed underwriting guidelines would flag as “unacceptable” anyone with a criminal conviction in the past 10 years who had not been with the insurer for more than two years. The manager said the insurer would be entitled to cancel the policy and reduce its liability for the claim to nil.

The complaints authority says the claimant breached his duty not to make a misrepresentation, noting the insurer clearly communicated the question and the potential consequences if he answered it incorrectly.

“I am satisfied the complainant was aware of the conviction when answering the question and by not answering the question correctly about his criminal history, the complainant has made a misrepresentation,” the authority’s adjudicator said. “The exchanged material shows the insurer would not have insured the complainant had he not breached the duty to take reasonable care not to make a misrepresentation about his criminal history.

“As the insurer showed it would not have offered cover ... it follows that it can reduce its liability for the ... claim to nil.” 

The ruling also entitles Auto & General not to refund the policy premium, after it showed it had covered a separate claim in January last year while unaware of the insured’s policy breach. 

Click here for the ruling.