Authors: Katherine Hayes, Partner, Greg Stirling, Senior Associate & Hayley Nankivell, Law Graduate
The Australian Financial Complaints Authority recently affirmed an insurer’s decision to decline a claim for vehicle damage because the policyholder failed to disclose that he was using his car for ridesharing purposes with Uber, despite the vehicle being in personal use at the time of the accident.
Background
The driver was involved in an accident on 16 April 2019, causing damage to his car. At the time of the accident, the vehicle was being used for personal purposes and not for ridesharing.
The driver held a comprehensive vehicle policy (policy) with the insurer, and lodged a claim in respect of the damage caused by the accident. The policy had originally been taken out by the driver on 9 March 2018, and was subsequently renewed on 9 March 2019.
The driver had renewed the policy online and was provided with documents which set out his duty of disclosure pursuant to s 21 of the Insurance Contracts Act 1984 (Cth). Section 21 places an obligation on an insured to disclose every matter the insured knows (or a reasonable person in the insured’s circumstances could be expected to know) is relevant to the insurer’s decision of whether to offer insurance.
As part of the renewal in March 2019, the driver declared the vehicle was for private use only, and that it was never used for any commercial use, including Uber. However, records indicated the car had been registered with Uber from 10 March 2018; the day after the driver entered into the initial policy. The driver did not disclose this change of circumstances at renewal.
