The Incident
The man lodged a claim after a road rage incident caused damage to his back bumper in June last year. Suncorp initially accepted the claim and offered a cash settlement as it was uncertain if the pre-existing damage to the car’s panels and tail light would have been included in the repair process.
The Investigation and Decision
Not satisfied with the offer, the claimant rejected it, accusing the assessors of missing further damage caused by the incident. The insurer further investigated the claim and discovered that the claimant did not disclose pre-existing damage when he purchased the policy. According to Suncorp, this was a breach of the policy's terms, as the claimant had answered "no" to a question asking if the vehicle had any existing damage or rust.
The policyholder argued that the damage to the tail light had been “only minor” and that the damage caused by wear and tear was irrelevant to the claimed event. However, the AFCA decision agreed with the insurer’s opinion that the complainant had omitted relevant information that would have influenced its decision to offer the policy.
The Impact of Negligence
The ruling found that the claimant had failed to take reasonable care when he made the misrepresentation. Had Suncorp been aware of the damage, it would not have agreed to offer the claimant the comprehensive car insurance policy, as its underwriting guidelines outlined exclusions for vehicles with damage not caused by wear and tear. Instead, the insurer noted that an application for Third Party Property Damage cover (TPPD) would have been accepted given the vehicle condition.
While the insurer offered $7635 to the policyholder, which was above the TPPD policy $5000 liability limit, the claim for compensation for financial and non-financial losses was quashed by the ruling. The AFCA noted that Suncorp had handled the claim within reasonable timeframes and in line with good industry practice.
The Importance of Disclosure
This case highlights the importance of providing accurate and complete information when applying for an insurance policy. If you fail to disclose any relevant information, it may cause problems when making a claim. The insurer will investigate the situation and may reject your claim, as the omission of critical data breaches the terms of the policy. Negligence may also have implications if the vehicle is insured for TPPD only, as the property damage caused must be the result of an accident involving your vehicle.
Remember to read the policy application carefully. If you are unsure of anything, consult with your insurer. Make sure to disclose all necessary information, including pre-existing conditions, and take reasonable care to ensure that the information provided is accurate. Don’t risk invalidating your policy and causing problems when you need to make a claim.
