A policyholder whose cover was cancelled over a failure to disclose business operations at her home has won a dispute after the complaints authority rejected her insurer’s fraud allegation.

The woman lodged a theft claim in March 2023, but it was denied by IAG, which said she had fraudulently misrepresented the use of her rental property when buying the policy.  

She had listed the property as “private use” when applying for cover in August 2022.

IAG told the Australian Financial Complaints Authority the woman had registered her business at the rental property in September 2021. It said she ran an “online business which involves 15 employees and wholesale of goods”.

The claimant said her answer was truthful, because she was not operating the company at the time of policy inception and had earlier used her home address only to obtain an Australian Business Number to order stock.  

She said the stock was delivered to her ex-husband’s house, and she showed AFCA a tax invoice for make-up products ordered before the policy was bought that were not delivered to her home.  

AFCA says IAG’s position appeared to be based on inferences from the woman’s tax records, the registered address, and that the business was operating at the time of the theft.  

But the insurer has not presented “contemporaneous information, such as business or financial records” to show the company operated at the rental property.  

“The information it has provided is based on evidence obtained over six months after the policy was applied for, or for the financial year before (tax return),” an ombudsman said.

“I do not accept the ABN registration is of itself compelling ... it is not unusual for a business or company to have a registered address that does not necessarily match the address where the business is being conducted from.”

AFCA acknowledges the complainant provided “limited” information supporting her case, but notes it is “more contemporaneous” than the insurer’s.  

It says IAG has not provided enough evidence to warrant its serious allegation, and it should reinstate the policy and accept the claim.  

See the ruling here.