A broker who sent a renewal notice incorrectly listing a boat’s market value at $10,000 above the insured sum has won a compensation dispute.

The policyholder claimed on her policy, which was arranged by Network Insurance Group in 2017, after the boat was damaged on January 2 last year. The insurer paid her the $25,000 insured sum.

The boat owner then wanted Network Insurance to compensate her a further $10,000 because, when claiming, she saw that a 2022 renewal document mistakenly stated a $35,000 sum insured.

The Australian Financial Complaints Authority says the broker made a mistake on the renewal form but did not breach its duty of care and had acted in “an efficient, honest and fair way in its dealings”, arranging insurance in accordance with her instructions.

“While it made a clerical error in one of the documents provided, it has expressed its regret and handled the issue openly,” the authority’s ruling said. “While the broker’s renewal transfer invoice incorrectly listed the insured amount of $35,000, the insurance confirmation form listed the $25,000 sum insured in a highlighted box. The insurance confirmation form was clearly read by the complainant because it was completed, amended and signed by her.”

The boat owner’s admission that she was unaware of the mistakenly inflated insured sum figure until after the damage incident means “she could not have placed reliance on it when she renewed the policy”.

The 2022 email had premium quotes from four insurers and the broker’s renewal transfer invoice stating an insured sum of $35,000. Email reminders in October and November 2022 also featured the incorrect renewal transfer invoice, plus the insurer’s confirmation form with the correct sum insured and the insurer product disclosure statement. 

On November 7 2022, the boat owner returned the completed insurer confirmation form by email. She did not change the sum insured of $25,000 that had been in place for several years. On the day of the damage incident, she emailed again and said she had just paid the policy premium to Network Insurance and asked it to pay the insurer as soon as possible.

AFCA saw no evidence she wanted insurance arranged for a $35,000 insured sum.

The boat owner also said complex wording and terms should have been explained to her by the broker, particularly a term around amounts for personal effects and sporting equipment. But AFCA says that information was in the product disclosure statement and there is no evidence “the complainant ever asked about this term”.

“It is beyond the broker’s duty to the complainant to explain every term in the policy,” AFCA said. “Nothing in the exchanged information provides any reason why the broker would identify this particular term as requiring further explanation.”

See the full ruling here.