An insurer was right to reject a car theft claim after its policyholder failed to mention two criminal convictions when renewing his cover, the industry ombudsman says.

Budget Direct said the motorist did not disclose the assault convictions recorded in NSW in November 2024. He had been fined $1000 for each offence.

The man’s policy renewed on February 1 2025.

The motorist said he lived in Victoria and argued he had not known of the NSW convictions because they were not brought to his attention.

He said the insurer should have done a criminal history check before issuing the policy and accused it of acting in bad faith by continuing to collect premiums before using the “unknown” convictions to reject his claim.

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But the Australian Financial Complaints Authority says it is unlikely a court would convict someone without being satisfied that reasonable attempts were made to notify them of the charges.

It also rejects the argument that the insurer should have checked his criminal history, saying insurers can generally rely on information provided by applicants.

Budget Direct told AFCA it considered any criminal conviction within the previous 10 years an unacceptable risk, and it would not have offered cover.

AFCA accepts this and has told the insurer to refund premiums from February 1 2025.

It has rejected the man’s demands for compensation over delays and shortcomings in claim handling.

AFCA says any delays resulted from the complainant taking time to provide registration papers and a police check.

See the ruling here.