The financial services ombudsman has backed IAG’s decision not to renew a motor policy because a customer’s claims history is unacceptable according to its underwriting guidelines.  

The insurer told the man it would not renew his special vehicle policy after he exceeded its limit of three at-fault claims in a five-year period.  

The insured had made four claims related to one of his three covered cars between June 2021 and last August.  

The customer said the decision was unfair and that if he was aware of the limit on claims, he would not have lodged some of them.  

He said the accidents were minor and, while he accepted liability, he “was not really at fault”.  

The man also argued that because three cars were insured under his policy, the claims cap should have been nine or more.  

But the Australian Financial Complaints Authority says the insurer’s guideline was based on the number of claims made under a policy, regardless of the number of cars covered.  

It acknowledges that because the claims relate to only one car, IAG should renew cover for the others. 

But it rejects the man’s request for IAG to renew all with separate policies for each vehicle, because the underwriting considerations would still apply and make him an uninsurable risk.  

“The insurer is entitled to refuse to renew the policy because it has shown it acted in accordance with its underwriting guidelines,” an authority ombudsman said. “For the same reason, I do accept the complainant’s submission that, because the claims relate to only one of the insured cars, the insurer should renew the policies for the other cars.”

See the ruling here.