A car owner has won a dispute over his failure to disclose criminal convictions after the complaints authority found he had a “reasonably held subjective belief” he was not required to reveal them.

The policyholder lodged a damage claim after driving into a car park where his vehicle exceeded the height limit.  

Insurer Auto & General investigated the claim and found the man had misrepresented his criminal history by failing to disclose several convictions between 2001 and 2011 for fraud offences and failure to comply with parole conditions.  

The insurer said the non-disclosure was a breach of policy terms and it was entitled to deny the claim and cancel the man’s policy.  

The complainant referred to “information online” stating he did not have to inform the insurer of convictions dating back more than 10 years.

But the insurer argued this did not apply to custodial sentences of more than 30 months in jail. Court documents show the man was sentenced to three years in prison, but he said he served only 22 months. 

The Australian Financial Complaints Authority says the policy dictated that the insured was not required to reveal “convictions or offences that the law permits you not to disclose”.  

It acknowledges Auto & General’s argument that the sentence was more than 30 months, but says the distinction is irrelevant because the complainant’s belief he did not have to disclose it “was reasonably held, even if it was incorrect”.  

“It is apparent the complainant believed he did not have to disclose his prior convictions,” an AFCA ombudsman said. “The ambiguity created by the contextual information accompanying the question meant this belief was not unreasonably held.  

“Given this, I am not satisfied the insurer can show the complainant failed to take reasonable care when answering the question. He answered it consistent with his belief at the time and subject to the conditions imposed in the question itself.”  

AFCA says Auto & General did not have grounds to cancel the insurance and it must reinstate the policy and cover the claim.  

See the ruling here.