A trucking company has lost a claim dispute after falsely declaring through a broker that it had operated and held insurance for two years before buying a policy from NTI.

The company – with a sole director referred to as “B” – lodged a claim under the NTI commercial motor vehicle policy after its truck was stolen in May last year.

NTI declined the claim and refunded premiums, saying B had misrepresented the business’ insurance history and its radius of operation, and if correct information had been given it would not have offered cover.

B’s company bought the truck a year before the theft for $82,500 from business partner “C”, the sole director of another company called “CT”.  

C organised the insurance with NTI through his broker, and the policy was issued on May 23 2023. 

“Two” was entered under the application’s “years of previous operation” question, and in a dropdown menu on NTI’s platform a previous insurer was selected.  

NTI later provided a document showing the complainant had no previous insurance, and the Australian Financial Complaints Authority, ruling on the claim dispute, says the business had in fact been operating for 19 months at most.  

“I acknowledge the complainant’s business relationship with CT may have caused confusion for the broker,” an AFCA ombudsman said.

“However, I am satisfied that a reasonable person ... would not have advised the insurer that the complainant had two years of insurance history.

“The fact the broker prepared two alternative quotes and adjusted the years of operation confirms he was aware this was an important factor in the insurer’s decision-making.”

The certificate of insurance included a radius of operation of less than 600km from a Queensland address, but the truck travelled to Victoria and did work around Sydney.

“Given that the vehicle regularly travelled interstate, it was plainly incorrect,” AFCA said.  

Both disclosures misrepresented the facts, the authority says.

AFCA does not accept that “there was no breach of the duty because B’s business partner had the declared insurance history.

“CT was not the named insured on the policy. The relevant entity for the purpose of the duty of disclosure was the complainant.

“The complainant has entered into a contract with the insurer by using incorrect information ... Having at least two years of prior commercial motor vehicle insurance is a stipulation for a policy to be issued.

“I am satisfied that the complainant made misrepresentations in applying for the policy and therefore breached the duty of disclosure.”

CT held a one-year transport operator insurance policy from November 2022, but AFCA says insurance history “does not transfer with the sale of the truck. CT’s insurance history is not the complainant’s insurance history, as they are two separate legal entities.

“The complainant should have selected ‘no previous insurance (new venture)’.”

NTI provided screenshots showing its system would have automatically declined the risk if correct information had been entered.

See the ruling here.