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‘Onus of proof’ on insurer, AFCA rules in disclosure dispute

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CommInsure has no grounds to decline a claim from a complainant who did not disclose her partner and co-policyholder has a criminal record, the Australian Financial Complaints Authority (AFCA) has ruled.

AFCA says the “onus of proof” is on the insurer if it is to rely on an exclusion to reject the claim from the home insurance policy the couple bought in June 2016.

Based on the evidence produced, AFCA says CommInsure failed to prove it had asked the complainant the relevant disclosure questions before the policy commenced.

The complainant had submitted a claim following an “invasion” of the insured address a month after the policy was activated. A motor vehicle, mobile phones, a gaming console and jewellery box were among the items stolen.

CommInsure subsequently turned down the claim, citing the woman’s failure to disclose that one of them had a criminal history.

The employee who arranged the policy said in a statutory declaration that his normal scripting would include informing the complainant of her duty of disclosure. But the insurer was not able to provide any supporting evidence that this was the case. The process it had at that time did not require the complainant to acknowledge she had been duly informed.

“The issue for decision is whether the insurer clearly informed the complainant of the duty of disclosure and asked the relevant questions of the complainant prior to commencing the policy,” AFCA says.

AFCA concluded the insurer “failed to clearly inform the complainant of her duty of disclosure”.

There was also no information to “prove the complainant breached her duty of disclosure or misrepresented [her partner’s] criminal history”.

AFCA accordingly ruled that CommInsure must settle the claim. The policy provided $90,000 in cover for insured contents and $22,500 for a platinum engagement ring.