A car owner who failed to tell his insurer about a criminal conviction for drug possession will have his theft claim assessed after the dispute authority found his misrepresentation did not warrant a policy breach.

The complainant was convicted of possessing a “commercial quantity of a schedule 1 dangerous drug” in June 2019 and received a good-behaviour bond for 16 months.

The man bought a comprehensive car insurance policy with Auto & General Services in July 2020 and renewed annually. He lodged a claim in July 2023 after his vehicle was stolen.

Auto & General declined the claim on the basis the claimant did not disclose his criminal history. It said the man failed to comply with his duty of disclosure and did not take reasonable care to avoid making a misrepresentation.

But the complainant said he believed he had a clean record when he applied for the policy and became aware of the conviction only after speaking to his barrister following the theft.

The man provided email correspondence between his mother and his lawyers in which she recalled the barrister telling her outside court that the sentence had been a “good outcome” and would not appear on his record “as long as ... nothing else happens in the meantime”

The barrister who represented the man later said the complainant and his mother may have misinterpreted his words.

The complainant supplied the Australian Financial Complaints Authority with his National Police Certificate and a court transcript, both of which confirmed the man had a conviction.

Auto & General said the complainant had the opportunity at renewals to correct the information or contact the insurer if he was unsure. It noted its question on criminal history was “clear and unambiguous”.

The insurer argued the barrister’s comments were not provided in a legal capacity but rather as a recollection of a previous conversation. It said if it had been aware of the conviction, it would not have offered the policy.

AFCA says the complainant “disclosed what he believed to be the truth, based on his barrister’s advice”. It says it is “understandable” that, given the man’s youth and absence of previous convictions, he relied on his barrister to explain the outcome of his trial, and that his version of the advice is supported by the email correspondence.

It also notes the claimant received his National Police Certificate in March 2023, after the policy had been renewed for the year.

AFCA now requires the insurer to assess the theft claim.

See the full ruling here.