A driver whose motor claim was denied because she had not disclosed she was on a probationary licence has lost a dispute with her broker. 

The driver, aged in her early 50s and new to Australia, was seeking that Professional Services Corporation Pty Ltd compensate her, saying it failed to act with due care and skill when it assisted her to apply for the policy.  

She told the Australian Financial Complaints Authority (AFCA) that the broker had failed to obtain an interpreter and properly explain the policy terms – specifically her need to be on a full licence to be covered. 

The broker had helped her apply for a car insurance policy in March last year, when she attended a car dealership to collect a car purchased on her behalf some months earlier. A friend attended with her and assisted with language interpretation, and a dealership sales representative also spoke her native language. 

In her insurance declaration form, she was asked to disclose whether she held a current Australian driver’s licence (non-provisional). She responded by ticking “Yes,” though she was on a provisional licence at the time.  

The application was submitted via email and because it was temporary, a copy of her Australian driver’s licence did not indicate whether it was full or provisional.  

The insured vehicle was later involved in an accident and repaired at a cost of $140,000. AFCA said the information the client provided in her application was incorrect, and that resulted in the claim being declined. 

It ruled the broker took reasonable and appropriate steps to ensure she was supported during the application process, including by the salesperson and friend, who provided language support at the dealership as well as via email and phone.  

The policy was not applied for at the dealership but sent via email, which AFCA said gave her the opportunity to seek language interpretation assistance if she had any concerns about her understanding of the application or the policy.  

Having ensured she was assisted by an interpreter, obtained a copy of her licence, and ensured her details were correct, AFCA says the broker acted with the due care and skill of a competent and experienced broker. The AFCA panel also noted the driver indicated she had several years driving experience.  

"The panel is satisfied the insurance broker was not reasonably aware the complainant was on a provisional licence and as such was not obliged to take additional steps to ensure the impact of this was understood, or to query the suitability of the policy,” the ruling said.  

AFCA also noted her friend had called to change the kilometre limit in the policy to unlimited. That “shows there was an understanding and a review of the insurance application,” AFCA said. 

“The insurance broker took all reasonable steps to ensure the complainant (despite the language barriers) understood the terms of the policy. Therefore, the panel is satisfied insurance broker acted with reasonable care and skill. 

“It would not be fair to require it to compensate the complainant,” it ruled. 

Her copy of the policy schedule advised she must hold a full Australian driver’s licence and stated a probationary licence would not be accepted, and her representative sent an email confirming the details were correct. 

AFCA noted the proposal stated “non-provisional” rather than probationary but said a “reasonable person in the circumstances would determine the term non-provisional and probationary to be of a similar meaning – that being, not a full licence”. 

“The insurance broker provided adequate assistance and had no reason to question whether the policy and application had been properly understood,” it said. 

Professional Services Corporation Pty Ltd is one of the AFS licences of ASX-listed PSC Insurance Group. 

See the ruling here.