A homeowner who bought insurance without disclosing his property was under a community title has lost his bid for a payout following a fire.

Hollard showed it would not have insured the building and contents if the man had told it of the title.

The claimant said he did not know the home was under a community title, but in a dispute ruling, the Australian Financial Complaints Authority says he breached his duty of disclosure and the insurer’s application question about ownership was clear.

The man bought his policy through his private health insurer, although the cover was underwritten by another insurer. In July 2022, the health insurer changed the underwriter to Hollard and told the homeowner he would need to apply to Hollard to maintain cover.

He applied online and Hollard showed that if he had answered correctly regarding the community title ownership, he would have received a message saying it would cover contents only.

Hollard found out about the community title in December 2024 when the man claimed for water and smoke damage from a fire next door.

It said he made a misrepresentation when applying for cover and repeated it when renewing the policy.

The homeowner told AFCA the question was technical and ambiguous, and he understood it as relating to properties such as apartments managed by a formal body corporate or strata manager, whereas he lived in a standalone townhouse.

But the ombudsman says the community title was clearly documented and the insurer’s questions were clear, noting that under the Insurance Contracts Act “a misrepresentation does not have to be intentional”.

Hollard accepted the non-compliance was innocent rather than fraudulent.

AFCA has awarded the man $1000 compensation for non-financial loss relating to a delayed claim decision, saying Hollard offered this.

Read the ruling here.

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