The policyholder initially applied for coverage in August 2022, designating her property for "private use." However, IAG contested this, asserting that she had registered her business at the same location in September 2021. The insurer claimed that the woman's home served as the base for her online business, which purportedly involved managing 15 employees and engaging in wholesale goods.
In her defence, the claimant argued that she was truthful when procuring the insurance, claiming she did not operate any business activities onsite at the time of policy inception. According to her account, the business address was used solely for Australian Business Number registration purposes, and her business operations were conducted elsewhere. She further substantiated her claim by providing documentation that showed stock deliveries were made to her ex-husband's address, not her rental property.
AFCA noted that IAG's allegations primarily relied on inferred conclusions drawn from the policyholder's tax documentation and business registration rather than concrete, current operational evidence. According to the ombudsman, the insurer's evidence emerged months after the policy was issued, lacking immediate records of business activity at the rental property.
In its ruling, AFCA concluded that the insurer failed to present sufficient evidence to support its accusation of fraudulent behaviour. The ombudsman highlighted that a company's registered address does not inherently reflect active business operations at that location. Given the circumstances, AFCA advised IAG to reassess its decision, reinstate the woman's policy, and honour her theft claim.
This ruling underscores the nuanced considerations involved when insurers assess the validity of policyholder claims concerning home business disclosures.
