Undisclosed debt agreement results in rejected insurance claim
Undisclosed debt agreement results in rejected insurance claim
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
A motorist lost her insurance claim dispute after failing to disclose a debt agreement while renewing her insurance policy.
The insured claimed for damage to her car following an accident in March last year. After buying her policy in i2018, she renewed it in i 2020. The client had entered a debt agreement on January 31, 2019 but failed to disclose it to her insurer at renewal.
The insurance company rejected her claim, saying it learned only recently she had a debt agreement and would not have re-issued the policy if it had known.
The insured alleged that she was not asked whether or not she had entered a debt agreement when renewing her policy but the Australian Financial Complaints Authority (AFCA) determined that the insurer had reasonable grounds to deny the claim due to the non-disclosure of information by the complainant.
The AFCA found evidence from which it appeared that the insurer informed the complainant of her duty of disclosure on policy renewal in a clear manner.
According to AFCA , “Section 21 of the [Insurance Contracts Act] provides for the insured’s duty to disclose every matter known to the insured that the insured knows to be a matter relevant to the insurer’s decision to accept the risk”.
The complainant said the insurer did not ask her specific questions about her financial position and was unaware of her need to inform the insurer that she had a debt agreement.
“I acknowledge that the complainant says that the insurer should have specifically asked her about her financial position during phone calls, however, the insurer is not required to do this.” AFCA said
The certificate of insurance required that the insured confirm that she was not currently bankrupt or subject to a debt agreement. The AFCA states that the complainant “provided no information to indicate a change in the matter”.
The insurer said that it was prejudiced by the fact that she withheld information about her debt agreement, and would not have renewed her policy had she informed them of this.
The insurer had to refund the complainant's premium for the policy period that commenced from her renewal if it had not done so.
Published:Wednesday, 25th May 2022 Author:
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
The Australian Prudential Regulation Authority (APRA) has recently taken decisive action to address escalating concerns within the commercial auto insurance sector. In response to widespread industry protests over substantial premium increases, APRA has implemented emergency regulations aimed at protecting independent transport operators and logistics enterprises from potential financial distress. - read more
As 2026 unfolds, Australian insurers are confronting a trio of pressing challenges that are reshaping the industry's landscape. According to insights from Gallagher Bassett's upcoming report, 'The Carrier Perspective: 2026 Claims Insights,' the foremost concerns include rising premium costs coupled with shrinking insurability, escalating cyber and data risks, and increasing difficulties in attracting and retaining skilled workers. - read more
Australia's transport industry is sounding the alarm over a significant and growing shortage of truck drivers, a situation that poses a substantial threat to the nation's supply chain. The National Road Transport Association (NatRoad) has highlighted that the current shortfall of approximately 28,000 drivers is projected to escalate to 78,000 unfilled positions by 2029, representing a 26% decrease from the current workforce of 189,900 drivers. - read more
The Australian Prudential Regulation Authority (APRA) has released a pivotal report highlighting the pressing need for immediate and substantial action to shield communities from the escalating impacts of extreme weather events. This Insurance Climate Vulnerability Assessment (ICVA) serves as a stress test, modelling potential future scenarios rather than forecasting specific outcomes. However, the risks outlined are already becoming evident, reinforcing the insurance industry's calls for urgent intervention to mitigate extreme weather risks. - read more
The Financial Advisers Association of Australia (FAAA) has recently voiced its opposition to proposed increases in professional indemnity (PI) insurance limits, cautioning that such changes could lead to significant cost burdens for financial advisers. In a submission to the Treasury's consultation on potential reforms to PI insurance within the financial services sector, the FAAA emphasised that reforms to the Compensation Scheme of Last Resort (CSLR) should take precedence over adjustments to minimum PI settings. - read more
Markel, a prominent US-based specialty insurer, has announced the launch of professional indemnity (PI) insurance products specifically designed for the Australian market. This strategic move comes in response to a notable reduction in PI insurance capacity over recent years, leaving many professionals seeking reliable coverage options. - read more
The financial services sector in Australia has been identified as a focal point for professional indemnity (PI) claims, driven by heightened regulatory scrutiny and recent enforcement actions. Legal experts from Moray & Agnew Lawyers have highlighted that the Australian Securities and Investments Commission (ASIC) has initiated proceedings against investment funds such as Shield Master Trust and First Guardian, leading to prosecutions across the financial services chain. - read more
The Insurance Council of Australia (ICA) has recently called for significant reforms to Victoria's strata legislation, highlighting concerns that poor governance and deferred maintenance are contributing to increased insurance premiums for the state's strata property owners. This appeal underscores the pressing need for legislative updates to enhance the management and maintenance of strata-titled properties. - read more
CHU, Australia's leading strata insurance underwriting agency, has significantly increased its capacity to insure larger residential and commercial strata developments. The company has raised its maximum single risk capacity from $300 million to $690 million, more than doubling its previous limit. This expansion applies to CHU's strata insurance policies across both residential and commercial properties, encompassing all property-related sections under a single policy, including insured property, catastrophe cover, and lot owners' fixtures and improvements. - read more
Europ Assistance Australia (EAA) has achieved a significant milestone by obtaining a general insurer licence, enabling the company to underwrite its own travel insurance products. This development underscores EAA's dedication to the Australian market and its travellers. - read more
If you are in the market for a new or used car, then we're in the market to help you arrange the money. Our car loan & leasing finance service is backed by a national panel of car loan specialists who will establish your eligibility, find lender/s offering the best deals for your situation - and help you through the approval and settlement process. No charge to you - and no obligation to proceed with any recommendations offered.
In the world of agriculture, having the right insurance coverage is essential. Farming is a high-risk industry that deals with unpredictable elements, and insuring your farm equipment can safeguard your livelihood. - read more
Farming in Australia is more than just a way of life; it is a critical sector that supports the nation’s economy and food supply. However, managing a farm comes with its own set of unique risks. From natural disasters to equipment failures, farmers face numerous challenges that can impact their livelihood. - read more
Crop insurance is a type of insurance policy designed to protect farmers from the financial losses that arise from damages to their crops. This could be due to various risks, including adverse weather conditions, pests, and diseases. - read more
Risk management is the practice of identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events. In farming, risk management involves various strategies to protect the financial health and operational stability of the farm. - read more
Australian farmers face an array of natural disasters that can threaten livelihoods and disrupt the delicate balance of agricultural ecosystems. From devastating bushfires and droughts to powerful storms and floods, these catastrophic events pose serious risks to the farming community. Understanding and preparing for these forces is not just about survival; it's about building a sustainable future for farms across the continent. - read more
As the backbone of Australian agriculture, farm equipment plays an essential role in day-to-day operations across our expansive and diverse landscapes. From the vast wheat belts to the tropical fruit farms, machinery ensures efficiency and productivity in the face of constant challenges. But with reliance on such equipment comes significant risk—the financial burden of damage or loss can be devastating to a farmer's livelihood. - read more
Farm liability insurance is a type of coverage that protects farmers from financial losses due to legal claims and lawsuits. This insurance is crucial for safeguarding your farm against various liabilities that may arise from farm operations. - read more
For Australian farmers, livestock is more than just a vital asset; it's the heartbeat of their livelihood. In a land where the sunburnt plains are as relentless as they are beautiful, protecting your herd isn't just a duty; it's a necessity. That's where livestock insurance comes into play—a shield against the unpredictability of Mother Nature. - read more
Australian farmers face a unique set of challenges due to the vast and varied climate conditions that sweep across the continent. From the scorching heat and prolonged droughts of the Outback to the tropical storms and torrential rains of the northern regions, weather-related risks are an integral part of agricultural life in Australia. - read more
Welcome to the first steps in future-proofing your farming legacy. When we think about the hustle and bustle of daily farm life, it's easy to overlook the critical importance of estate planning. For the Australian farmer, estate planning is not just a matter of securing your assets; it's about ensuring the survival and progression of your hard-earned labour to the next generation. - read more
Need a Quote?
Start your free farm insurance quote comparison here.
Knowledgebase
Surrender Value: The amount of money an insurance policyholder will receive if they voluntarily terminate the policy before it matures.