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Man loses dispute after failing to disclose 13 prior car claims

Allianz has won a dispute with a man who failed to disclose he had lodged more than a dozen car insurance claims in five years when quizzed about his history as he took out a new policy.

Allianz’s underwriting guidelines say applications for insurance must be denied if the person to be insured has made more than four claims in the previous three years.

During a phone call in mid 2018, the man answered ‘no’ when Allianz asked ‘have you had any accidents or claims in the last five years?’

In fact, he made 11 car insurance claims in the previous three years, and 13 in the last five years.

This came to light after the man bought an Allianz policy on July 4 2018 and later lodged a claim after his car was damaged in a collision. Allianz denied the claim on the basis of non-disclosure, saying if it knew about his claims history it would not have offered the policy.

The man’s lawyer said he had a limited grasp of English and had answered Allianz’s questions to the best of his ability. However, Allianz said he spoke in English and did not appear to have any difficulty understanding questions.

The man’s psychiatrist said he suffered a chronic depressive illness and frequently had difficulty with sleep, leading to poor concentration which affected his short-term memory. He did not intend to deceive Allianz, was "deeply regretful" of not disclosing his claims history and believed he was not at fault for any of his recent car accidents.

The Australian Financial Complaints Authority (AFCA) ruled Allianz was entitled to deny the claim.

“The psychiatrist’s letter …. does not indicate his memory issues are so severe that he could not remember any of the 13 claims he had lodged,” AFCA said. “The man says he did not intend to deceive Allianz. However, this does not relieve him of his duty of disclosure.”

An insured may breach the duty of disclosure even if they have no fraudulent intent.

“I am satisfied that the man knew about his claims history, and knew (or should have known) that it was relevant to Allianz’s decision to offer insurance,” the AFCA ombudsman said. “If not for the breach, Allianz would not have insured the man.”

AFCA said a recorded statement played by Allianz for the man during a phone call ten days before he bought his policy “adequately explained the nature and effect of the duty of disclosure”.

Allianz, which agreed to refund the premium paid for the policy, provided copies of its records showing it declined applications for insurance from other people because of their claims history.

“Some of these applicants had a better claims history than the man,” AFCA said. “Allianz is entitled to deny the claim.”

See the full ruling here.