A complainant who lodged a claim for a car accident after her policy expired will not be compensated after a dispute ruling found that her insurer acted appropriately and did not know that she was suffering from an illness later diagnosed as terminal cancer.

The woman filed the claim after an incident involving her niece on July 6 last year under her comprehensive motor vehicle policy, which Allianz denied because she did not hold active cover with the insurer.

Allianz said it sent the claimant a letter on April 17, inviting her to renew the policy before it expired on May 13. The letter informed her that if she did not pay the $689.40 premium on time, the policy would be cancelled.

A “Mailhouse Reconciliation Report” provided by the insurer to the Australian Financial Complaints Authority (AFCA) showed the letter was sent to the complainant’s last known address, which she acknowledged was correct.

The insurer also provided its file notes which suggested that the claimant told the insurer on July 6 that she received the “renewal documents” but that they got lost with other mail.

The complainant, who was represented by her daughter Mrs P, said that she found a letter “dated May 2022,” as she was looking for policy documents following the claimed incident.

Mrs P said that she made a payment through the insurer’s automated telephone system after learning that the policy was not renewed and the insurer led her to believe that the claim was approved.

But AFCA said that she made payment after the policy expired, which meant she was not covered for the claimed incident.

The ruling noted that emails from Allianz did not “approve the claim” but instead accepted that the claim had been lodged.

AFCA also referred to the complainant’s testimony that the insurer advised her not to make a payment when she filed the claim over the phone.

“The complainant also says the insurer took the claim over the phone and said not to make the payment at that stage,” AFCA said.

“This supports the conclusion that the insurer told Mrs P at the start of the process that the complainant did not have cover with the insurer.”

Mrs P said that her mother had been undergoing health complications at the time of the renewal and was later diagnosed with terminal cancer after undergoing tests.

AFCA acknowledged the difficulties of the complainant but said the insurer had not known of her condition while it was handling the claim.

It said it was “unfortunate” that the complainant did not respond to the renewal and expiry letters but that Allianz acted within its rights to decline the claim.

"I accept it was not her intention for the policy to lapse," the ombudsman said.

"The complainant did not arrange cover with another insurance provider and was likely unaware she was uninsured.

“However, the insurer met its obligations under section 58 of the [Insurance Contracts Act 1984] Act and the PDS. The policy did not renew because the complainant did not make the payment,” AFCA said.

“As there was no cover in place at the time of the loss, it would be unfair to compel the insurer to approve the claim.”

Click here for the ruling.